DNZ Property Fund Ltd focused on lifting its operating profit before other income & income tax by 11.6% to $35 million for the March 2014 year.
But the more important performance was that net profit fell 8.7% to $41.6 million, reducing basic earnings/share from 18.33c to 14.5c.
At least those earnings/share figures were visible – plenty of other listed entities hide them away.
Chairman Tim Storey said yesterday: “This year’s results are very pleasing, particularly as it has been a transformative period in a number of respects. Distributable profit/share is slightly ahead of last year, during a period where the company has completed a capital raising and incurred costs in the appointment of Peter Alexander as chief executive, the restructure & refocus of the management team and the acquisition of the Silverdale Centre.
“The board & chief executive are reviewing the company’s strategy, which has as a key objective the delivery of growth in total shareholder returns. DNZ will continue to look for new initiatives to add value, whilst remaining focused on delivering the Westgate Mall development. We expect that development to be a strong performing investment for DNZ & its shareholders.”
Key points in DNZ’s financial performance:
- Net profit after tax down 8.7% to $41.6 million ($45.5 million last year)
- Basic earnings 14.5c/share (18.33c/share), diluted earnings 14.47c/share (18.25c/share)
- Net rental income up 7.2% to $57.4 million ($53.5 million)
- Operating profit before other income & income tax up 11.6% to $35 million ($31.3 million)
- Distributable profit before income tax up 17.4% to $35 million ($29.8 million)
- Distributable profit after income tax up 15.7% on an aggregate basis to $27.7 million ($24 million), 9.67c/share (9.64c/share)
- Cash dividend of 9c/share for the year, 2.25c/share for the fourth quarter, 0.6224c/share imputation credits; dividend reinvestment plan suspended for the fourth-quarter dividend
- Loan:value ratio 34.4% (36.9%)
- Net 2.5% ($18.7 million) property portfolio valuation increase on a like-for-like basis
- Occupancy stable at 99.5% (99.6%)
- Weighted average lease term 5.5 years (5.2 years)
- 199 lease transactions over 289,240m² for a total annual rental of $46.2 million
- 2015 financial year lease expiries down from 16.58% in 2013 to 8.44%
- Net tangible asset backing increased to $1.69 ($1.62)
- Portfolio now valued at $780.2 million ($667 million), with a 7.94% weighted average capitalisation rate.
DNZ completed 199 lease transactions:
- 120 rent reviews over 207,304m² for a total annual rental of $34.3 million
- 45 lease renewals over 29,974m², $4.6 million
- 34 new lettings completed over 51,962m², $7.3 million.
On the new Westgate mall development, Mr Alexander said: “The response from retailers has been very positive. It is just 6 weeks since we announced construction of the mall and pre-leasing has already increased to over 45%.”
The total development cost of the mall is just over $155 million, including land at cost, and the value on completion is estimated at $160 million, representing a 7.75% yield on cost, assuming the mall opens fully leased.
Mr Alexander said DNZ had also secured a 6-year lease post-balance date with Capital SMART Repairs NZ Pty Ltd for a design-build on part of the remaining development land at O’Rorke Rd. The 1400m² warehouse & office facility, complete with a 430m² canopy, is scheduled for completion in October, with a development cost of $2.46 million, including land. On completion this will leave just 7600m² of land available for development on this 5.2ha site.
Attribution: Company release.