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

 

Media: Julian Wilcox Leaves Māori TV

Māori Television has confirmed the resignation of Head of News and Production Julian Wilcox. Mr Maxwell acknowledged Mr Wilcox’s significant contribution to Māori Television since joining the organisation in 2004. More>>

ALSO:

Genetics: New Heat Tolerant Cow Developed

Hamilton, New Zealand-based Dairy Solutionz Ltd has led an expert genetics team to develop a new dairy cow breed conditioned to thrive in lower elevation tropical climates and achieve high milk production under heat stress. More>>

Fractals: Thousands More Business Cards Needed To Build Giant Sponge

New Zealand is taking part in a global event this weekend to build a Menger Sponge using 15 million business cards but local organisers say they are thousands of business cards short. More>>

Scoop Business: NZ Net Migration Rises To Annual Record In September

New Zealand’s annual net migration rose to a record in September, beating government forecasts, as the inflow was spurred by student arrivals from India and Kiwis returning home from Australia. More>>

ALSO:

Scoop Business: Fletcher To Close Its Christchurch Insulation Plant, Cut 29 Jobs

Fletcher Building, New Zealand’s largest listed company, will close its Christchurch insulation factory, as it consolidates its Tasman Insulations operations in a “highly competitive market”. More>>

ALSO:

Scoop Business: Novartis Adds Nine New Treatments Under Pharmac Deal

Novartis New Zealand, the local unit of the global pharmaceuticals firm, has added nine new treatments in a far-ranging agreement with government drug buying agency, Pharmac. More>>

ALSO:

Crown Accounts: English Wary On Tax Take, Could Threaten Surplus

Finance Minister Bill English is warning the tax take may come in below forecast in the current financial year, as figures released today confirm it was short by nearly $1 billion in the year to June 30 and English warned of the potential impact of slumping receipts from agricultural exports. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news