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National Property Trust 6-Month Result

26 January 2006

National Property Trust 6-Month Result

The National Property Trust (NPT) today announced its 6-month result to 30 November 2005. The Trust achieved a net surplus before taxation of $1.86 million for the period, down from $2.37 million in the previous year.

Investment and property group St Laurence took over the management of NPT on 1 December 2005, appointed a new Board and subsequently commissioned an extensive review of the Trust, including its development projects, its financial position and projections.

St Laurence founder and managing director, and new NPT executive chairman Kevin Podmore stated that the six month result had been adversely impacted by the new Boards decision to provide for $790,000 of doubtful debts. He said this was considered to be a non-recurring cost as a large portion of the debts related to tenants affected by its retail development projects.

He also announced that whilst some improvement in earnings performance is expected over the second half of the year, full year results are likely to fall short of the previous Board's expectations. In addition to the provision for doubtful debts various other factors have impacted the quantum and timing of the revenue including increasing interest rates and reduced earnings from development projects at the Goddards Centre, Eastgate Shopping Centre (Stage 3) and the Torrens House Apartments.

As a result of the lower earnings projections and the funding of ongoing capital commitments, the new Board has announced an interim suspension of the Trust’s dividend distribution policy for the remainder of the 2005/06 financial year. This means that the payment of distributions that would usually be made in March, June and September 2006 will now not be made.

Mr Podmore said, “The new Board has reviewed the financial position and projections for the Trust, and as a result has confirmed that continuing to make dividend distributions for the remainder of the financial year would adversely compromise the Trust’s cash position. The Board has reluctantly made the decision to cease dividend distributions and is also seeking to improve the capital position of the Trust.

Mr Podmore confirmed that in 2005 the previous Board had agreed a change in the dividend distribution policy for NPT. As previously advised to the market NPT is now paying distributions from operating earnings. Distributions in recent years have had a contribution from reserves. Annual gross distributions for the last four years have ranged between 8.4 and 9.0 cents per unit.

“The Board has advised that further consideration is being given to the previously announced capital raising and unit holders will be advised of the level and form of the capital raising as soon as possible. As part of that process the Board will also be reviewing the Trust’s future dividend distribution policy.”

Mr Podmore reiterated that the underlying property assets and development projects were sound. “Capital and revenue growth are key objectives for NPT and we now need to put in place financing structures that will allow for this. We see good opportunities for NPT within its existing property portfolio as well as via other property acquisitions. Over the coming months the Manager will be working to ensure these opportunities are realised.”

Mr Podmore acknowledged the strong support of NPT unit holders and said that the Trust will be writing to them with further information on both the interim dividend distribution policy and capital raising plans.

“St Laurence is delighted to be managing NPT and as with all investments we oversee we look forward to adding value to its portfolio of properties. We believe it is important to put in place now a sound financing structure to realise value in future years”, Mr Podmore said.

Established in 1994 NPT is a unit trust with over $268 million in assets with a portfolio of retail, commercial and industrial properties located in Auckland, Tauranga, Wellington, New Plymouth, Napier, Christchurch and Dunedin. Units of the trust have been listed on the NZX since December 1996.

With St Laurence’s purchase of the Manager of NPT on 1 December 2005, the St Laurence group now has more than $1 billion in assets under management, a significant milestone for a company established in 1994. St Laurence is one of New Zealand’s leaders in property-based investment and brings significant experience to the Management Company of NPT.

The new Board appointed on 1 December 2005 includes Mr Podmore as executive chairman, professional company Directors Ted van Arkel and Brian Kreft, St Laurence executive director Phil Newland, and St Laurence Director of Finance and Administration Sandra Lee.


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