Abacus Reports 8-Fold Profit Rise, Stable FFO, and 4.25c Distribution

Financial Turnaround and Stability

Abacus Group has delivered a notable financial turnaround in the half-year ended 31 December 2025, posting a statutory net profit after tax of $47.6 million compared to a loss of $5.7 million in the same period last year. Despite a slight 1.6% dip in total revenues to $82.5 million, the group’s funds from operations (FFO) remained steady at $40.1 million, underscoring the resilience of its core business operations.

The group’s earnings per stapled security rose to 5.33 cents from a negative 0.64 cents previously, reflecting improved profitability. Meanwhile, the interim distribution was maintained at 4.25 cents per security, consistent with the prior period, signalling confidence in ongoing cash flow generation.

Portfolio Valuation and Property Strategy

Abacus’ investment property portfolio, valued at over $1.8 billion, experienced a marginal decline of $0.8 million or 0.1% during the half-year. The weighted average capitalisation rate softened slightly to 6.81%, reflecting broader market conditions influenced by elevated interest rates. Notably, 27% of the portfolio underwent independent valuation, with the remainder assessed internally.

The group continues to focus on commercial office and retail assets, predominantly leased to small and medium enterprises in well-located CBD and suburban areas. This tenant mix and location strategy are seen as key to maintaining occupancy and rental stability amid market uncertainties.

Diversification and Joint Ventures

Abacus has been actively diversifying its income streams beyond traditional rental revenue. As the external manager of Abacus Storage King (ASK), the group earns management and development fees, alongside a share of ASK’s profits. This joint venture remains a significant contributor, representing over 10% of total revenue.

In a strategic development post balance date, Abacus announced preliminary discussions to potentially internalise ASK’s management functions. To oversee this process, an independent board committee has been established, highlighting the group’s commitment to governance and securityholder interests as it evaluates the proposal.

Capital and Debt Profile

Abacus maintains a disciplined capital allocation approach, retaining assets that offer the best risk-adjusted returns. The group’s weighted average interest rate on debt improved to 4.53%, down from 5.11%, supported by a mix of fixed and floating rate borrowings secured against investment properties. The total drawn bank debt stood at approximately $921.5 million, with available facilities providing further financial flexibility.

Cash flow from operating activities increased significantly to $42.9 million, reflecting improved operational performance, while investing and financing activities were managed prudently to support the group’s strategic objectives.

Outlook and Governance

Abacus Group’s board, led by Chair Myra Salkinder and Managing Director Steven Sewell, remains focused on navigating the challenges of the current economic environment. The group’s strategy emphasises active asset management, customer-centric development, and maintaining a robust balance sheet.

With the potential internalisation of ASK’s management functions under review, investors will be watching closely for developments that could reshape the group’s operational structure and future earnings profile.