Scentre Group (ASX: SCG) has made an announcement about its FY21 distribution. Should ASX dividend investors think about the business again?
What did Scentre announce?
Scentre Group is holding its annual general meeting (AGM) today.
Management pointed out that the business has been doing a number of things to try to improve things for the shopping centre’s operations. It has built its Westfield Plus membership program to around 1.5 million members, allowing Scentre to engage more personally with shoppers.
It has also introduced a service called Westfield Direct which is a drive-through, contactless click and collect service.
Scentre said these initiatives have positioned the business to accelerate growth as consumer confidence continues to pick up.
It has continued to invest in its portfolio and during the year it completed a number of developments including a new dining precinct in Melbourne’s Westfield Doncaster, introducing 14 new restaurants to the centre.
In December 2020, it appointed Cbus Property to design and construct the residential and commercial tower on the site of the former David Jones menswear store on the corner of Market and Castlereagh streets in Sydney’s CBD.
The distribution comments
Scentre said that whilst COVID-19 uncertainty remains in 2021, subject to no material change in conditions, the group expects to distribute at least 14 cents per security for 2021. That translates to a distribution yield of at least 4.8%.
Management also said that the distribution is expected to continue to grow in future years. It plans to retain earnings to cover operating and leasing capital expenditure, fund strategic initiatives and reduce net debt.
The business said it needs to keep moving and innovating.
Summary thoughts for ASX dividend share investors
Scentre has been hit hard. The Scentre share price is still 28% lower than the mid-January 2020 price. It could be a ‘value’ opportunity if it can grow earnings in the long term, but there are quite a few less-affected, quality ASX dividend shares out there.
