Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Kiwi Income posts 7.8% drop in FY profit on CBA exit costs

Kiwi Income posts 7.8% drop in annual profit on costs to exit CBA management contract


By Tina Morrison

May 20 (BusinessDesk) - Kiwi Income Property Trust, the country’s second-biggest listed property investor, posted a 7.8 percent drop in annual profit as costs from exiting its management contract with Commonwealth Bank of Australia outweighed valuation gains and insurance payments.

Net income fell to $101.3 million in the year ended March 31, from $109.8 million a year earlier, Auckland-based Kiwi Income said in a statement. Revenue rose 5 percent to $208.7 million.

Kiwi Income paid $74.5 million to exit its management contract with CBA, taking the management inhouse, and plans to put a proposal to investors later this year to move to a company structure which it says will reap savings and greater protections under the Takeovers Code and Companies Act.

In the past year, the trust increased its after-tax distributable income by 25 percent to $76.3 million. Net rental income rose 9.7 percent to $148.7 million as it benefited from new and refurbished properties. The trust will pay a final distribution of 3.2 cents per unit, taking the annual payment to 6.4 cents. It expects that to increase to about 6.5 cents in the coming year as it benefits from a strengthening economy.

Units in the trust last traded at 1.155 cents apiece and have gained 7 percent this year.

Kiwi Income expects its distribution reserve and the financial benefits from taking its management contract inhouse will enable it to forego 21 months without rent from its building at 56 The Terrace in Wellington from November as the property undergoes a $67 million refurbishment ahead of a new 18-year lease with the Ministry of Social Development.

The value of the trust’s property holdings increased by $8.5 million over the past year, taking the total value to $2.13 billion. The value of its interest rate derivatives rose by $29.1 million and it gained $52.9 million from insurance and litigation settlement.

Kiwi Income’s bank debt gearing ratio rose to 35.2 percent from 32 percent a year earlier, reflecting the cost of bringing management inhouse and development of its properties at Centre Place, Northlands, and the Majestic Centre in Wellington.

The costs were partly offset by the sale of a 50 percent interest in 205 Queen St, Auckland, for $47.5 million, which was used to pay debt. Since balance debt, the buyer had exercised its right to buy the remaining half share for $56.3 million on June 3, the Trust said.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Net Annual Migration Passes 71,000

A record 71,300 more migrants arrived in New Zealand than left in the January 2017 year, Statistics New Zealand said today. This surpassed the previous annual record set in December 2016. More>>

ALSO:

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news