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Kermadec Full Year Result to March 08



Kermadec Property Fund Limited today reported an un-audited Net Profit after Taxation for the year ended 31 March of $6.18 million, ahead of the $3.39 million which was forecast in the Kermadec initial prospectus and investment statement of November 2006.

Net profit excluding property revaluations, one-off items and taxation was $5.74 million compared to the prospectus forecast $5.06 million.

Earnings per share were 8.28 cents. Earnings per share before revaluations, one-off items & deferred tax (Distributable Profit) were 6.86 cents.

Property revaluation gains for the 2008 year were $2.52 million, lifting the adjusted net tangible assets per share (excluding deferred tax on revaluation gains) to $1.14 per share.

Total assets increased by 29% to $138.8 million following the acquisition of the 7 City Road and Berkeley Cinema properties, and the divestment of the Waitakere District Courts Building. The increased assets were funded by new equity of $16.8 million and additional borrowings of $12.4 million. Gearing at year-end was 34.6% (Interest bearing debt/total assets), consistent with the company’s target gearing level.

The Kermadec portfolio performed well throughout the year. Eight major rent reviews were agreed, achieving average increases of 17% and an overall increase in net rental income of $0.39 million.

Leasing initiatives resulted in an enhanced lease profile with weighted average lease expiry (WALE) increasing to 6.4 years. Vendor underwritten income was reduced to 6% of total income by year end compared to 12% at March 2007.

A final gross distribution for the three months ended 31 March 2008 of 2.17 cents per share will be paid on 21 May 2008. This distribution will consist of 1.84 cents per share of cash and 0.33 cents per share of imputation credits. This will bring total gross distributions for the year to 8.66 cents per share in line with prospectus forecasts and brings the cash component of the distributions to 7.79 cents per share, slightly ahead of the prospectus forecast 7.71 cents per share. The distribution re-investment plan will be in operation for the final distribution, with the DRP strike price to be set at $0.7379 per share.

Post balance date Kermadec shareholders have approved the acquisition of the Finance Centre Podium. This property is adjacent to Kermadec’s two largest existing property holdings and will be immediately earnings accretive. The acquisition is scheduled for settlement in July 2008.

The board of Kermadec remain cautiously optimistic about the company’s outlook over the 2009 year, with the softening economy posing risks but also providing opportunities. The company expects to maintain its current level of dividend distributions for the 2009 financial year.

Financial Statements & analyst presentation have been provided to NZX and are available on the company’s website at


See... 080516_KPF_FY_2008_Result_Presentation.pdf

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