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GMT announces record profit and new business initiatives

GMT announces record profit and new business initiatives

The Manager[1] of Goodman Property Trust has announced a record profit result for the Trust and a package of new business initiatives that will improve its future investment performance.

An expanded and enhanced property portfolio, together with fair value gains from the Trust’s property assets and derivative financial instruments have all contributed to this year’s strong financial result.

Highlights include:

+ A 61.5% increase in profit before tax to $146.8 million, compared to a profit of $90.9 million in the previous corresponding period.
+ Distributable earnings[2] before tax of $101.1 million or 8.36 cents per unit on a weighted average issued unit basis.
+ Fair value gains of $23.8 million, as a result of the portfolio revaluation.

+ Net tangible assets of 100.4 cents per unit, compared to 95.6 cents per unit at 31 March 2013.

+ Full year cash distributions totalling 6.25 cents per unit.

Keith Smith, Chairman of the Manager, said, “It is extremely pleasing to be reporting strong profitability and a distributable earnings result at the upper end of our guidance range. A strengthening economy and rising business confidence are contributing to increased activity levels right across our business.”

John Dakin, Chief Executive Officer of the Manager said, “Accelerating GMT’s development programme and realising the value in its strategic land holdings remains a key focus.”

With increasing levels of economic activity driving customer demand, 15 new projects with a combined total cost of $165.7 million have been announced since March 2013. It is the greatest volume of development work in more than five years, creating around 95,000 sqm of high quality industrial and office space.

John Dakin said “Our development programme is a good barometer of business confidence and we are excited by the strong progress that has been achieved. Sustaining this level of activity, as the economy grows over the next 2-3 years, will enhance the portfolio while improving the quality and profile of the Trust’s earnings.”

New business initiatives

Keith Smith said, “The benefits of strategic decisions made over the last 18-24 months are reflected in this year’s impressive financial result. To ensure that GMT retains its position as a leading investment entity we have consulted with our stakeholders and will be implementing a package of new business initiatives that includes enhancements to the management and governance structures of the Trust.”

These initiatives include:

1. Unitholder nomination and voting for Independent Directors, aligning the Trust’s governance practices more closely with that of a listed company
2. An amended fund fee structure that features:
o a rebate equivalent to the fee incurred on development land
o The issue of GMT units in consideration for the payment of the fund fee[3]
3. An intention to suspend the Distribution Reinvestment Plan later this year, funding new development and investment activity through asset sales
The governance and management fee initiatives are subject to Unitholder approval which will be sought at the Annual Meeting on 5 August 2014. Further details will be provided in the Notice of Meeting and Explanatory Memorandum, to be issued in July 2014.

Keith Smith, “There is an increasing momentum across all GMT’s business activities and we are optimistic about our future growth prospects. Refinements to the management and governance structures together with a more active capital management strategy are positive new initiatives that will enhance the Trust’s investment performance.”
Cash distributions for the 2015 financial year are expected to total around 6.45 cents per unit, a 3% increase on the 2014 financial year.
1 The Manager of Goodman Property Trust is Goodman (NZ) Limited, a business subsidiary of the ASX-listed Goodman Group. Goodman Group is also the Trust’s largest investor with a 17.6% cornerstone unitholding.

2 Distributable earnings is an alternative performance measure used to assist investors in assessing the Trust’s underlying operating performance. Refer to the appendix of this announcement for details on how this measure is calculated.
3 For a period of up to five years, subject to Goodman Group’s ownership not exceeding 25% of GMT.


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