UMH Properties ((UMH)) has held its Q4 earnings call. Read on for the main highlights of the call.
UMH Properties, Inc. recently held its earnings call, revealing a generally positive sentiment among its leadership. The company showcased strong performance in key financial metrics, such as Funds From Operations (FFO) per share and record sales achievements. Despite facing challenges like increased operating expenses and looming mortgage refinancing, the overall outlook remains optimistic, with future growth strategies expected to outweigh these hurdles.
Increased FFO Per Share
UMH Properties reported a notable increase in its normalized FFO per share, reaching $0.24 for the quarter, which marks a 4% rise from the previous year. For the full year, the FFO per share was $0.93, representing an 8% increase. This growth highlights the company’s ability to enhance its financial performance consistently.
Record Sales Achievement
The company’s sales division achieved an all-time high for the third consecutive year, with gross sales amounting to $33.5 million, an 8% increase from the previous year. This record-breaking performance underscores UMH Properties’ effective sales strategies and market presence.
Expansion in Inventory and Occupancy
UMH Properties expanded its portfolio by adding 565 homes, achieving a 94% occupancy rate. The same property income grew by 9%, and the same property Net Operating Income (NOI) increased by 10% for the year, indicating strong operational efficiency and demand for its properties.
Acquisition Pipeline Growth
The company has four communities under contract, with a total purchase price of $39.1 million and a blended cap rate of 5.5%. This expansion reflects UMH Properties’ strategic focus on growth through acquisitions, positioning it well for future success.
Strong Total Shareholder Return
UMH Properties reported a total shareholder return of approximately 30% in 2024. Over five years, the return was 51%, and over ten years, it reached an impressive 234%. These figures highlight the company’s commitment to delivering value to its shareholders.
Increased Operating Expenses
The company faced an 8% rise in community operating expenses during the quarter and a 7% increase for the year. This was primarily due to higher payroll, real estate taxes, and other costs, reflecting the broader economic challenges impacting the industry.
Mortgages Due Soon
UMH Properties has $115.2 million in mortgages due within the next twelve months. While refinancing efforts are underway, they remain subject to current interest rates, posing a potential risk to the company’s financial stability.
Inflation Impacts
Inflation has led to increased expenses for UMH Properties, affecting its overall operating results. This challenge is part of a broader economic trend impacting many companies in the real estate sector.
Forward-Looking Guidance
Looking ahead, UMH Properties provided guidance for 2025, anticipating FFO to range between $0.96 to $1.04 per share. The company plans to invest over $100 million in projects yet to yield returns and aims to add 800 new rental homes. Additionally, they expect to close acquisitions totaling $39.1 million, with potential improvements in occupancy and revenue through strategic expansions.
In summary, UMH Properties’ earnings call reflected a positive sentiment, driven by strong financial performance and strategic growth plans. Despite facing challenges like increased expenses and mortgage refinancing, the company’s forward-looking guidance suggests continued operational growth and shareholder value. Investors and stakeholders can remain optimistic about UMH Properties’ future prospects.