Calan Lifts After Tax Profit And Distribution
August 22, 2005
CALAN LIFTS AFTER TAX PROFIT AND DISTRIBUTION
Statement made by Bruce Davidson, Chairman, Calan Healthcare Properties Limited
Calan Healthcare Properties Trust (NZX Code: CHP) today announced:
- A 16%
increase in Net Surplus After Tax to $10.5 million.
- All planned sales of non yielding assets have now been completed.
- Total assets increased by $6.6 million.
- A 6.25% increase in the annual pre tax distribution for the year to 30 June 2005 to 8.5 cents per unit (8.0 cents in the prior year).
- A forecast 8.2% increase in the annual pre tax distribution for the year to 30 June 2006 to 9.2 cents per unit (8.5 cents in the 2005 year).
- Opening of Epworth Eastern Hospital rated by Australian media as Australia’s leading facility.
- A $6.4 million reduction in debt.
- An 8% increase in Net Tangible Assets of the Trust to $1.19 up from $1.10.
- An increase in the weighted average lease term to 11.65 years, up from 10.05 years.
Calan Healthcare Properties Trust has delivered a 16% increase in audited after tax profit of $10.5 million for the year ending 30 June 2005.
This increase in performance reflects the benefit of two years of restructuring and repositioning, and the Trust is today an attractive investment for investors seeking low risk and a medium return.
On the basis of our improved profit, we increased the December quarter’s distribution to 2.15 cents per unit, up 7.5%, and the June 2005 quarter’s distribution to 2.20 cents per unit, up 2.3%. This brings the pre tax distribution for the year to 8.5 cents per unit, an increase of 6.25% on the prior year. With the additional income stream from Epworth Eastern, the directors have announced that the distribution for the September 2005 quarter will be increased to 2.30 cents per unit, up 15% on the same period last year.
The main drivers behind the increase in profit were the sale/settlement of $22.2 million of non yielding assets – the proceeds from which were used to reduce debt and offset debt drawdown to fund the Epworth Eastern project in Melbourne – and a 9.7% reduction in operating expenses.
Rental increases from rent reviews undertaken during the year and a partial contribution from Epworth Eastern, lifted total revenue by 11.6% to $15.98 million.
Operating expenses before interest at $2.06 million were 9.7% lower than last year’s $2.28 million, primarily due to a lower level of property acquisition and investment evaluation costs.
Net borrowing costs were $1.94 million compared with last year’s $1.28 million as a result of a lower level of capitalised interest on Epworth Eastern in the 2005 financial year.
Overall bank debt reduced by $6.4 million to $49.5 million, delivering a substantially lower debt to total asset ratio of 22.7%, down from 26.5%.
The other significant operational achievement during the year was the practical completion of our A$45 million flagship hospital complex in Melbourne. The hospital accepted its first patient at the start of June, and performance to date is tracking well ahead of expectation.
The new hospital is fully tenanted, with the Epworth Foundation, the head tenant, having a 20-year lease over more than 90% of the building. A full years rental income from the Melbourne hospital over a 12-month period will be A$3.72 million.
Occupancy at year end across the entire portfolio was 99.1%, up from 96.5%, and the average weighted lease term to expiry was 11.65 years, up from 10.05 years. The Trust has the longest weighted average lease term of any property entity on the New Zealand Exchange by a significant margin.
In spite of selling three investments from our property portfolio, as a consequence of revaluations and the completion of Epworth Eastern, total assets at year end had increased to $218 million, up $6.6 million.
With an increase in profit and a lower level of tax depreciation allowance the tax expense was $1.9 million, up 34%.
The net tangible asset backing per unit increased to $1.19, from $1.10 due to a strong increase in the value of the properties within the portfolio.
From its sound base, Calan Healthcare Properties Trust can look forward to a solid 2006 performance. Our properties are occupied on an almost 100% basis by quality tenants on long leases that are in the main indexed to the consumer price index.
Now Calan is part of the NZX50 index, we will have a higher profile and greater focus will be placed on our increased level of distribution and the asset backing of our units compared with our NZX price.
Future growth will remain a key focus, and will take the form of either strategic acquisitions in the healthcare property sector or pre-committed new builds such as Epworth Eastern.
PRELIMINARY * /FULL YEAR REPORT ANNOUNCEMENT
(Name of Listed Issuer)
For /Full Year Ended 30-Jun-05
(referred to in this report as the " /full year")
Preliminary * /full year
report on consolidated results (including the results for
the previous corresponding
* /full year) in accordance with Listing Rule 10.4.2.
This report has been prepared in a manner which complies with generally accepted accounting practice and gives a true
and fair view of the matters to which the report relates [see Note [X] attached] and is based on audited
financial statements. If the report is based on audited financial statements, any qualification made by the auditor is
is to be attached.
The Listed Issuer *has/ a formally constituted Audit Committee of the Board of Directors.
[PLEASE REFER TO ATTACHED NOTES WHEN COMPLETING THIS
1 CONSOLIDATED STATEMENT OF FINANCIAL Current *Up/Down corresponding
PERFORMANCE * /full Year % * /full year
1.1 OPERATING REVENUE
(a) Trading Revenue 14,360 3.1% Up 13,928
(b) Other Revenue 2,022 171.0% Up 746
(c) Total Operating Revenue 16,382 11.6% Up 14,674
1.2 OPERATING *SURPLUS (DEFICIT) BEFORE TAXATION 11,123 10.5% Up 10,066
(a) Less taxation on operating result 1,869 33.6% Up 1,399
1.3 OPERATING *SURPLUS (DEFICIT) AFTER TAX 9,254 6.7% Up 8,667
(a) Extraordinary Items after Tax [detail in Item 3]
(b) Unrealised net change in value of investment properties 100% Down ( 976)
(c) Unrealised surplus on Investment Properties Under Construction 1,290 7.9% Down 1,400
1.4 NET *SURPLUS (DEFICIT) FOR THE PERIOD 10,544 16.0% Up 9,091
(a) Net *Surplus (Deficit) attributable to minority interests - -
1.5 NET SURPLUS (DEFICIT) ATTRIBUTABLE TO MEMBERS 10,544 16.0% Up 9,091
OF THE LISTED ISSUER
*Consolidated Statement of
2 DETAILS OF SPECIFIC RECEIPTS/OUTLAYS, REVENUES/ Current Previous
EXPENSES FOR * /FULL YEAR * /full year corresponding
$NZ'000 * /full year
2.1 INCLUDED IN CONSOLIDATED STATEMENT OF FINANCIAL
(a) Interest revenue included in Item 1.1(b) 403 358
(b) # Unusual items for separate disclosure (gain/loss) (detail - Item 3) - -
(c) Equity earnings (gain/loss) (detail - Item 16) - -
(d) Interest expense included in Item 1.2 (include all forms of interest, etc) 2,342 1,640
(e) Leasing and renting expenses - -
(f) Depreciation - -
(g) Diminuton in the value of assets (other than depreciation) - -
(h) Amortisation of goodwill - -
(i) Amortisation of other intangible assets - -
(j) Impairment of goodwill - -
(k) Impairment of other intangible assets - -
Consolidated Statement of
Consolidated Statement of Financial Position
(Note (VIII) attached has particular relevance for the preparation At end of As shown in If half yearly
current last as shown in last
9 CURRENT ASSETS: * /full Year Annual Report half yearly report
$NZ'000 $NZ'000 $NZ'000
(a) Cash 654 362
(b) Trade receivables 2,295 3,996
(c) Investments - -
(d) Inventories - -
(e) Other assets, current 364 12,890
TOTAL CURRENT ASSETS 3,313 17,248
9.1 NON-CURRENT ASSETS
(a) Trade receivables 6,122 1,805
(b) Investments 912 6,854
(c) Inventories - -
(d) Property, plant and equipment 207,081 185,059
(e) Goodwill - -
(f) Deferred Taxation Assets - -
(g) Other Intangible Assets - -
(h) Other assets, non current 445 311
9.2 TOTAL NON-CURRENT ASSETS 214,560 194,029
9.3 TOTAL ASSETS 217,873 211,277
9.4 CURRENT LIABILITIES
(a) Trade Creditors 3,723 5,358
(b) Income in advance, current - -
(c) Secured loans - -
(d) Unsecured loans - -
(e) Provisions, current -
(f) Other liabilities, current - -
TOTAL CURRENT LIABILITIES 3,723 5,358
9.5 NON-CURRENT LIABILITIES
(a) Accounts payable, non-current -
(b) Secured loans 49,527 55,887
(c) Unsecured loans - -
(d) Provisions, non-current - -
(e) Deferred Taxation Liability, non-current - -
(f) Other liabilities, non-current - -
9.6 TOTAL NON-CURRENT LIABILITIES 49,527 55,887
9.7 TOTAL LIABILITIES 53,250 61,245
9.8 NET ASSETS 164,623 150,032
9.9 SHAREHOLDERS' EQUITY
(a) Share capital (optional) 146,124 144,659
(b) Reserves (optional) (i) Revaluation reserve 16,842 4,673
(ii) Other reserves (969) (1,074)
(c) Retained Surplus (accumulated Deficit) (optional) 2,626 1,774
9.1O SHAREHOLDERS' EQUITY ATTRIBUTABLE TO MEMBERS
OF THE LISTED ISSUER 164,623 150,032
(a) Minority equity interests in subsidiaries - -
9.11 TOTAL SHAREHOLDERS' EQUITY 164,623 150,032
(a) Returns on Assets (%) (EBIT divided by Total Assets) 6.6% 5.6%
(b) Return on Equity (%) (Net Income divided by Shareholders' 6.4% 6.1%
(c) Debt to Equity Ratio (%) (Total Liabilities divided by 32.3% 40.8%
of cashflows for * /full year
(See Note (IX) attached ) Current Corresponding
10 CASH FLOWS RELATING TO OPERATING ACTIVITIES * /full year * /full year
(a) Receipts from customers 15,850 15,493
(b) Interest received 403 488
(c) Dividends received - -
(d) Payments to suppliers and employees (2,427) (2,938)
(e) Interest paid (2,286) (1,772)
(f) Income taxes paid (1,969) (1,622)
(g) Other cash flows relating to operating activities 313 387
NET OPERATING FLOWS 9,884 10,036
(See Note (IX) attached )
11 CASH FLOWS RELATING TO INVESTING ACTIVITIES
(a) Cash proceeds from sale of property, plant and equipment 11,610 -
(b) Cash proceeds from sale of equity investments 7,011 -
(c) Loans repaid by other entities 203 9,384
(d) Cash paid for purchases of property, plant and equipment (12,032) (21,884)
(e) Interest paid - capitalised (1,351) (1,720)
(f) Cash paid for purchases of equity investments - -
(g) Loans to other entities - -
(h) Other cash flows relating to operating activities (143) (302)
NET INVESTING CASH FLOWS 5,298 (14,522)
(See Note (IX) attached )
12 CASH FLOWS RELATED TO FINANCING ACTIVITIES
(a) Cash proceeds from issue of shares, options, etc. - -
(b) Borrowings - 11,686
(c) Repayment of borrowings (6,128) -
(d) Dividends paid (8,762) (7,325)
(e) Other cash flows relating to operating activities - -
NET FINANCING CASH FLOWS (14,890) 4,361
(See Note (IX) attached )
13 NET INCREASE (DECREASE IN CASH HELD)
(a) Cash at beginning of * /full year 362 487
(b) Exchange rate adjustments to Item 12.3(a) above - -
(c) CASH AT END OF * /FULL YEAR 654 362
14 NON-CASH FINANCING AND INVESTING ACTIVITIES
Provide details of financing and investing transactions which have had a material effect on group assets and
and liabilities but did not involve cash flows:
15 RECONCILIATION OF CASH Previous
For the purposes of the above Statement of cash flows, cash includes: Current Corresponding
* /full Year * /full year
Cash at the end of the *half year/full year as shown in the statement of cash flows is
reconciled to the related items in the financial statements as follows:
Cash on hand and at bank 654 362
Deposits at call - -
Bank overdraft - -
Other (provide details eg Term Deposits - -
Total = Cash at End of * /Full Year (Item 13(c) above) 654 362
2005 2004 2005 2004 2005 2004
$000 $000 $000 $000 $000 $000
Geographical Segments New Zealand Australia Consolidated
Operating revenue - external 11,647 11,446 2,713 2,482 14,360 13,928
Unallocated revenue - - - - 2022 746
Total revenue 11,647 11,446 2,713 2,482 16,382 14,674
Operating expenses 1,635 2,099 705 794 2,340 2,893
Unallocated expenses 0 0 - - 4,211 3,038
Total expenses including tax 1,635 2,099 705 794 6,551 5,931
Unrealised Net Change in the Value of Investments 816 0 - - 816 0
Unrealised return on construction 0 0 1,290 1,400 1,290 1400
Loss on sale of investment properties (1,876) 230 (1,646) (76)
Gain on sale of equity investments 253 0 0 - 253 0
Net Change in Value of Investment Properties for Construction 0 (976) - - 0 (976)
Net surplus after tax 10,828 8,371 3,298 3,088 11,937 9,167
Segment assets 138,941 146,202 78,278 64,713 217,219 210,915
Unallocated assets - - - - 654 362
Total assets 138,941 146,202 78,278 64,713 217,873 211,277
The Group operates in one industry, investing in high quality “Health Sector” related properties.