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May 18, 2011

Goodman Property Trust Lifts After Tax Profit To $36.7 Million

Full year’s unit holder distribution 7.74 cents a unit
A ‘stabilising investment market’ saw specialist industrial and commercial property investor, Goodman Property Trust, lift audited after tax operating profit by $33.9 million to $36.7 million for the financial year ending March 31, 2011.

In announcing the result the Chairman of Goodman (NZ) Limited, Keith Smith, the Trust’s manager, said the Trust’s portfolio at period end had a value of $1.6 billion, down 1.5% over the 12 months.

“The financial result is testimony to the solidity of the Trust’s balance sheet and the effectiveness of our strategy to met the challenges of an economic recession, tighter credit markets and a cyclical downturn in the investment market,” said Mr Smith.

“Net property income increased by 2.4% to $108.7 million, while distributable earnings before interest and tax increased by 1.7% to $101.1 million.”

The Trust reported after tax distributable earnings of $78.0 million or 8.79 cents per unit ($77.5 million, 9.10 cents last year).

It has announced a final quarter distribution of 1.935 cents a unit bringing the full year’s distribution to 7.74 cents (8.50 cents last year).

Chief Executive, John Dakin, said “it has been a particularly eventful year with new leasing, greater investment activity and new capital management initiatives enhancing the business.

“We secured more than $20 million worth of additional annual net income with leasing commitments from new and existing tenants, and maintained the average portfolio occupancy at 96% with the average lease term at 5.6 years.”

Mr Smith said the Trust had completed a three-year comprehensive capital refinancing programme which gave it greater diversity as its sources of funding and more flexibility under the terms under which it borrowed.

“At period end the Trust’s net borrowings make up 36.7% of property assets (37% last year) with the level of debt at the lower end of the Board’s target band of 35% to 40%, and significantly below the 50% allowed under the new banking covenants.

“The Board’s capital management initiatives will ultimately contribute to greater capital growth for investors.”

Mr Dakin said while a highly competitive leasing market would limit income growth prospects in the short term, the longer term outlook was “increasingly positive”.

“Improvements in economic activity and investment sentiment will benefit the Trust, and we anticipate the industrial sector in particular will provide steady rental growth.”

The Trust’s distribution guidance for 2012 is between 8.4 and 8.6 cents per unit pre-tax and 7.7 to 7.9 cents a unit after tax. Under its retention policy the cash distributions paid to unit holders will be around 80% of distributable earnings after tax.

ENDS

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