Sound Result for Goodman Property Trust
Sound Result for Goodman Property Trust as new initiatives announced at AGM
Goodman Property Trust (“GMT” or “Trust”) described 2010 as ‘particularly notable’ for the strategic initiatives that contributed to a strong balance sheet position announced at today’s annual meeting in Auckland.
Chairman and Independent Director, Keith Smith, said despite the challenging economic environment of the past few years, GMT had responded by delivering a result ‘that reflected the maturity and resilience of a business well positioned to withstand fluctuating short to medium term market conditions’.
“After tax operating earnings were $77.5 million or 9.10 cents per unit, which represents a pleasing performance across all areas of the business. While increasing bank margins and costs associated with the successful corporate bond issue have contributed to a small decline, we have been able to maintain a strong balance sheet in a constrained market.”
Chief Executive Officer Goodman (NZ) Ltd, John Dakin said the board was comfortable with the level of debt which was 37% of property assets at 31 March 2010, well within its banking covenants.
Mr Dakin said prudent management and premium assets provided the best protection against economic shocks and general market cycles.
“The successful corporate bond issue in November 2009 was a strategic initiative that enables us to diversify and extend our sources of funding. We intend to build on this platform with today’s announcement of a $45 million wholesale bond. The wholesale bond issue, which is in the final stages of documentation, demonstrates investor confidence in the stability and strength of our business.”
The Trust also announced today a first quarter cash distribution of 1.935 cents per unit.
Mr Dakin acknowledged that the recent legislative changes removing building depreciation deductions will have corresponding tax implications for the business.
“While the removal of tax deductions will have a negative impact on GMT’s cash distributions in future years, it has not affected our investment objectives.”
He highlighted a return of investment activity with GMT recently making a strategic acquisition of the balance of Show Place Office Park in Christchurch.
“This significant acquisition demonstrates that despite the constrained investment environment, we are able to take advantage of compelling investment opportunities that provide long-term value.
“The Trust continues to differentiate itself as a leading provider of industrial and business property with its estates continuing to attract new business. During the year the Trust had new design build commitments from substantial customers like Ingham Micro NZ and Kmart at M20 Business Park, as well as IBM NZ at Highbrook Business Park.”