What is Happening to the Share Price of SCentre Group?

What does SCentre Group do?

SCentres Group [ASX:SCG] owns and manages the Westfield shopping centres in Australia and New Zealand, with assets under management of $42.1 billion.

The company has a total of 34 shopping centres in Australia, predominately along the eastern seaboard, and a further six in New Zealand.

Most of their shopping centres are concentrated in New South Wales, which is the most active economy in the country right now.

What’s moving the SCentre Group share price?

The SCG share price is being moved by better than expected rental returns, on the back of strong sales growth of their tenants.

On 23 February, the company posted their full year results, which were better than expected. Specialty store sales grew by 5.3% in Australia, and by 6.6% in New Zealand. Strong sales performance was seen across most categories with good increases in fashion and footwear, jewellery, leisure, health and beauty, technology and cinemas.

Those full year results were always going to be good; the chart of the company share price told you that well in advance.

Speaking broadly for the economy, the growth in specialty store sales shows the consumer is prepared to spend and has some confidence for the economic outlook.

The Groups funds from operations (FFO) is growing at 3.8%, and their portfolio remains in excess of 99.5% leased.

What now for SCentres shares?

It depends on the confidence of the consumer to keep spending in the Westfield stores. Despite concerns that Australia would be affected by the slowdown in China, the quarterly GDP figures released last month showed the Australian economy expanded 3% throughout 2015. And today, against forecasts, the unemployment rate fell again.

Whilst consumers remain solid, the outlook for SCentre Group is for continued growth.

The chart of the SCentre share price continues to find higher levels of support, confirming the outlook over the next few months look to be satisfactory.
Terence Duffy,
Research Analyst, Cycles, Trends and Forecasts

Terence Duffy is an analyst and chartist, specialising in researching economic trends and cycles.  His primary focus is housing and land affordability. But you can also depend on him to offer his unique analysis of stock market charts. As Terence will show you, the charts often forecast, well in advance, the good or bad news to come — which he details in Cycles, Trends and Forecasts.

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