CEO Resignation
Susan Lloyd-Hurwitz leaves position
Need To Know
- CEO leaves after 10 years in the role, creating a period of management uncertainty.
- New Chairman Rob Sindel joins 1 January 2023.
- Capital management unlikely until a new CEO appointed.
Investment implications
Mirvac CEO Susan Lloyd-Hurwitz resigns after 10+ years in the position – effective 30 June 2023. MGR has several internal candidates who potentially could fill the role. Head of Commercial, Campbell Hanan, former head of Investa Office would be seen as a strong candidate by investors.
Mirvac isn’t the only A-REIT with management uncertainty. LendLease Group (LLC) and Stockland Corporation (SGP) have seen CEO change over the last year, and press reports suggest Dexus (DXS) and GPT Group (GPT) could also be looking for change in CEO given tenure.
The longer the A-REITS are trading below their book values, the greater the likelihood of strategic/management changes or potential for M&A in our view.
The long-dated resignation suggests that it’s unlikely to see capital management in FY23E. Despite trading below book value, in our view the prospects for near term capital management unlikely until the new management team is in place. MGR last conducted a buy-back in 2018 at 0.9x book value.
We expect cyclical housing downturn and headwinds from interest rates to continue to weigh on the MGR share price. Management changes are unlikely to change the short-term fundamental performance of MGR which remains heavily influenced by outlook for residential and office property.
We will retain our HOLD rating for MGR given steep discount to book value at 0.7x.
Figure 1: A-REITS discount to book value. Possibility for more management changes at these levels.
Stock overview
Share Price
Company overview
Mirvac Group is an Australia-based company that is engaged in real estate investment, development, third-party capital management and property asset management.
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