Goodman Weaves Magic of Growth Without the Gearing. FVE Raised to AUD 8.30

Goodman reported a better-than-expected first-half fiscal 2018 profit of AUD 23.3 cents per security, or cps, and upgraded fiscal 2018 earnings and distribution outlook to 8% growth from 6% previously. We see Goodman as making well calculated decisions on its allocation of capital and how it operates with its key investment partners. The strategy to increase the percentage of development in the Goodman funds has numerous positives. First, the capital the firm has allocated to riskier activities is reduced, permitting deleveraging and boosting return on equity. Second, the strategy promotes stronger alignment between Goodman and its major investment partners, which bodes well for longer-term inflows and a stable base of assets under management.