Kennedy-wilson ((KW)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Kennedy-Wilson’s recent earnings call showcased a generally optimistic outlook, driven by notable growth in investment management and strategic capital deployment. The company highlighted its acquisition of Toll Brothers’ platform as a key factor in its promising future. Despite some challenges, such as a GAAP EPS loss and declines in the European office portfolio, the positive developments slightly outweighed the negatives.
Investment Management Growth
Kennedy-Wilson reported a significant increase in assets under management (AUM), which grew to $31 billion, marking an 11% rise year-over-year. Additionally, fee-bearing capital saw a 10% increase from the previous year, underscoring the company’s robust growth in investment management.
Successful Capital Deployment
The company successfully deployed or committed approximately $900 million in the third quarter, with total capital deployment reaching $3.5 billion year-to-date. This strategic allocation of capital highlights Kennedy-Wilson’s focus on expanding its investment footprint.
Credit Team Achievements
Kennedy-Wilson’s credit team originated $600 million in new rental housing construction loans, contributing to total originations of $2.6 billion for the year. This achievement underscores the company’s strength in credit-related investments.
U.K. Single-Family Rental Platform Expansion
The expansion of the U.K. single-family rental platform was marked by $62 million in new investments, bringing the total portfolio to 1,300 homes and committed capital to approximately $585 million.
Toll Brothers Acquisition
The pending acquisition of Toll Brothers is expected to add $5 billion to Kennedy-Wilson’s AUM, increasing the total pro forma AUM to $36 billion. This acquisition is set to significantly bolster the company’s asset base.
Improved Financial Metrics
Kennedy-Wilson’s adjusted EBITDA increased to $125 million in the third quarter, up from $66 million last year. Investment management fees also saw an 8% increase in the quarter and a 23% rise year-to-date, reflecting improved financial performance.
GAAP EPS Loss
The company reported a GAAP EPS loss of $0.15 per share in the third quarter, an improvement from a loss of $0.56 per share in the same quarter last year. This indicates a narrowing of losses despite ongoing challenges.
European Office Portfolio Decline
Kennedy-Wilson’s European office portfolio faced a 6% decline in same-property NOI, primarily due to a 5% drop in occupancy, highlighting challenges in this segment.
Northern California NOI Decline
The Northern California region experienced a 1.5% decline in NOIs, reflecting regional challenges that the company is addressing.
Affordable Portfolio NOI Challenges
The affordable portfolio’s same-store NOI remained flat as rental increases were offset by higher expenses, indicating a need for strategic adjustments in this area.
Forward-Looking Guidance
Looking ahead, Kennedy-Wilson remains focused on expanding its investment management platform and executing its noncore asset sale plan. The company aims to continue improving key financial metrics, with adjusted EBITDA showing significant growth. The acquisition of Toll Brothers is expected to enhance its national rental housing platform, while strategic debt management has strengthened the balance sheet.
In conclusion, Kennedy-Wilson’s earnings call reflected a positive sentiment, with growth in investment management and strategic acquisitions driving optimism. Despite some challenges, the company’s forward-looking strategies and financial improvements suggest a promising trajectory for future growth.