Investore Property Ltd attributed its 17.2% profit decline for the March year to a fall in property revaluations.
The company, which owns a portfolio of large shops, also noted a $493,000 management performance fee that lifted corporate expenses (no performance fee last year).
Net rental income rose $3.3 million, not enough to match the $5.9 million revaluation decline.
The company said it had continued with its commitment to deliver stable & enduring returns to shareholders through its strategic principles of active portfolio management, targeted growth, continued optimisation of the portfolio and proactive capital management.
Investore chair Mike Allen said independent director Kate Healy had resigned, effective today. She now lives in Melbourne.
The board also determined to conclude the share buyback programme which it announced on 1 August 2018. The share buyback was paused from 11 February 2019 pending the third quarter dividend announcement, and no further shares have been acquired since then.
Financial performance highlights (2018 figures in brackets):
- Net rental income $47.4 million ($44.2 million)
- Corporate expenses $6 million ($5.4 million), up $600,000, largely due to a performance fee of $493,000 payable to Stride Investment Management Ltd for the March quarter
- Profit before other income & income tax $27 million ($26.8 million)
- Profit after income tax down 17.2% to $38.6 million ($46.2 million), due largely to lower revaluation movement
- Net change in fair value of investment properties $17.2 million ($23.1 million)
- Distributable profit after current income tax $20.9 million ($20.5 million)
- Annual cash dividend 7.6c/share (7.46c), up 0.14c/share on 2018 & initial 2019 forecast; 1.935c/share cash dividend for March 2019 quarter
- Basic & diluted earnings/share 14.78c (17.64c)
Portfolio highlights (31 March 2018 figures in brackets):
- Weighted average lease term 12.4 years (13.1 years), with 2 significant lease renewals
- Total property portfolio value (including Countdown Dunedin South, subsequently sold on 1 April 2019), up 2.3% to $761.2 million ($738.3 million)
- Portfolio market capitalisation rate strengthened to 6.05% (6.19%)
- Occupancy 99.9% (99.9%)
- Net tangible asset backing/share $1.70 ($1.64)
- Countdown Dunedin South divestment for $19.328 million at 5.6% premium to 31 March 2018 book value
- Mitre 10 Mega, Botany, Auckland, development completed, increasing property value to $34.1 million, up 11% from 31 March 2018, and generating additional $300,000/year net rental
- Further refurbishments completed at Countdown stores in Greenlane Auckland, Lower Hutt & Upper Hutt, total 10 Countdown store refurbishments completed in the last 2 years
- $100 Countdown 6-year fixed rate listed inaugural bond issue April 2018
- $70 million bank debt refinanced, term extended to 2022
- Bought 1.7 million shares through share buyback programme
- Loan:value ratio 41.8% (41.6% at 31 March 2018); following settlement of the Countdown Dunedin South sale on 1 April 2019, loan:value ratio reduced to 40.4%
- Share buyback programme has been concluded.
Attribution: Company release.