Abacus Group (ASX:ABG) Shares Face Storage King Loss Overhang

Abacus Group stock closed at A$0.905 on Wednesday, only slightly higher over the past week, which suggests investors are still weighing up the full year 2026 result. The headline is an uncomfortable split personality. Funds From Operations, the key metric for a real estate investment trust, came in at A$81.2m and kept the operating engine steady. However, a one off A$122m non cash loss tied to the Storage King stake pushed statutory earnings deep into the red.

Love the steady A$81.2m FFO from Abacus Group but concerned about the hit from the non cash Storage King loss? Check out list of solid balance sheet and fundamentals stocks (20 results) for ideas that combine resilient operations with stronger balance sheets.

FY 2026 Earnings Summary

• Total Revenue FY 2026: A$198.3m vs. A$252.1m in FY 2025 (revenue declined 21.3%)
• Net Income FY 2026 (Excl. Extra Items): loss of A$74.5m vs. profit of A$26.9m in FY 2025 (moved into a loss)
• Basic EPS FY 2026: loss of A$0.083 per security vs. profit of A$0.030 per security in FY 2025 (moved into a loss)
• Funds From Operations FY 2026: A$81.2m vs. A$82.7m in FY 2025 (FFO eased 1.9%)

Prefer clean charts over wading through pages of Abacus Group figures and footnotes? See its full financial picture with a visual focus on valuation, insider trends and balance sheet strength in the company report for Abacus Group.

Abacus Group bull case leans on core office cashflows

Bulls argue Abacus Group is mainly an office and retail cashflow story and that Storage King noise should not distract from steady underlying earnings. FY 2026 FFO of A$81.2m, only slightly softer than last year, lines up with that claim and is backed by office earnings of A$89.6m that looked healthier once one off surrender fees are stripped out. Office like for like rent growth of 2% and leasing spreads of 5.5% with 89.2% occupancy show tenants are still signing on, even with 33% average incentives. Retail adds further support with A$30m of earnings, 97.4% occupancy and 8.4% leasing spreads at Oasis. Distribution guidance of A$0.067 with an 80 to 90% payout target and identified A$8.4m of annualised cost savings suggests management is aligning cash outflows more closely with recurring cash inflows.

Bear case focuses on earnings quality and balance sheet strain

Bears worry that Abacus Group relies on accounting FFO, aggressive incentives and a stretched balance sheet while Storage King adds volatility. FY 2026 already shows pressure. Reported FFO held, yet statutory earnings swung into a loss after a A$122m non cash Storage King remeasurement and NTA fell from A$1.72 to A$1.59. The distribution cut for FY 2027 to A$0.067 and a lower 80 to 90% payout target confirm that past distribution levels were hard to support from recurring cash. Office incentives at 33% and pockets of vacancy at 710 Collins St and other assets point to ongoing leasing cost intensity. Gearing of 36.2% on a headline basis and 41.2% on a covenant basis keeps the margin to the 50% covenant slim. A higher targeted cost of debt of 5.25% in FY 2027 underlines that interest remains a live earnings headwind.

Compare Abacus Group’s steady FFO and occupancy metrics with the hit to statutory earnings and NTA, then assess whether analysts think the current A$0.905 share price already reflects this trade off. See the consensus price target analysis for Abacus Group to check how the street’s targets line up with the latest numbers.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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