Vicinity Centres (ASX:VCX) share price lower on weak update

The Vicinity Centres (ASX: VCX) share price opened lower on Friday following a weaker quarterly update due to its Victoria-weighted portfolio
The post Vicinity Centres (ASX:VCX) share price lower on weak update appeared first on Motley Fool Australia. –

falling asx retail share price represented by sad shopper sitting in mall

Vicinity Centres (ASX: VCX) shares are inching lower this morning following the company’s September quarterly update. At the time of writing, the Vicinity share price has fallen 0.72% to $1.37.

Quarterly update highlights 

Vicinity highlighted three core macro trends that were driving its financial and operational performance during the quarter. These included: 

  • Government-mandated closures for most retail stores across Victoria since 6 August 2020, with extensive re-openings allowed from 28 October 2020. 
  • CBD centres impacted by many city employees continuing to work from home and by travel restrictions. 
  • Increased visitation and retail sales in centres outside of Victoria and CBDs compared to the June 2020 quarter. 

As a result, the company’s moving annual turnover (MAT), the total value of consumer spending on a rolling 12 month period, fell 15.2% in September compared to a 7% fall in June. If its portfolio excluded Victorian and CBD centres, MAT would have only fallen 1.7%.

Centre visitation for the week ended 3 November 2020 as a percentage of the same week in the prior year was sitting at 80% for Vicinity’s portfolio. This is an improvement from the September quarter which averaged approximately 58%. 

Vicinity’s cash collections for the September quarter represented 56% of gross rental billings. 

A slower recovery for the Vicinity share price 

Scentre Group (ASX: SCG) announced its quarterly update on Thursday which highlighted much stronger metrics across rent collection, consumer spending and centre visitation when compared to Vicinity. 

This is primarily driven by the fact that Vicinity’s portfolio is much more concentrated in Victoria, where for a 12-week period, 83% of its Victorian tenancies were closed due to government directives. With Victoria coming out of lockdown, Vicinity’s quarterly update did highlight a significant improvement in centre visitation for the week ended 3 November. 

Mr Grant Kelley, Vicinity Centres CEO and Managing Director, said:

We are confident that visitation across our Melbourne centres will continue to rebound, repeating the trend observed in other markets in Australia where the virus has been largely contained. When combined with borders re-opening and the return of domestic tourism, along with a steady increase in workers returning to CBD offices, this should support improved retail conditions across Australia. 

Due to current uncertain circumstances, Vicinity cannot presently provide FY21 earnings guidance. However, assuming no material deterioration in existing conditions, it does intend to pay a dividend for the six months to 31 December 2020. 

Foolish takeaway

Vicinity is unfortunately a step behind Scentre Group given its Victoria-weighted portfolio. Following today’s weaker quarterly update, the Vicinity share price is currently nearly 45% lower in year-to-date trading. 

These Dividend Stocks Could Be Your Next Cash Kings (FREE REPORT)

Motley Fool Australia’s Dividend experts recently released a brand-new FREE report revealing 3 dividend stocks with JUICY franked dividends that could keep paying you meaty dividends for years to come.

Our team of investors think these 3 dividend stocks should be a ‘must consider’ for any savvy dividend investor. But more importantly, could potentially make Australian investors a heap of passive income.

Don’t miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.

Click Here For Your Free Stock Report

Returns As of 6th October 2020

More reading

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Vicinity Centres (ASX:VCX) share price lower on weak update appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!