Vital Healthcare boosts earnings 50% on fatter rental income
by Paul McBeth
Aug. 23 (BusinessDesk) – Vital Healthcare Property Trust, whose unitholders will vote on whether to dump the manager at a special meeting, boosted adjusted earnings by 50% as it fattened its rental income on Australian acquisitions.
Net distributable profit, which strips out unrealised changes in property values, was $18.2 million, or 8.24 cents per unit, in the 12 months ended June 30, compared to $12.1 million, or 8.5 cents per unit, a year earlier.
That came on a 51% boost in net income to $36.6 million.
“The solid result was primarily due to the acquisition of the Australian portfolio and rental growth,” the company said in a statement. “Part of this gain, however, was offset by increased financing costs over the period.”
With property valuation writedowns of $10.5 million and a $6.3 million hit in foreign exchange reserves included, statutory net profit sank 87% to $2.4 million, or 3.34 cents per unit.
The trust’s board announced a quarterly distribution of 2.025 cents per unit, taking the annual payout to 8.1 cents.
The units rose 2.8% to $1.10 in trading today.
Negotiations between Vital’s independent directors and its manager over internalising the property trust’s management contract stalled earlier this month over a $2 million pay gap.
ANZ Bank’s OnePath, which owns the management company Vital Healthcare Property Management Ltd., wasn’t prepared to go below $8 million, having already cut $6 million from its starting point.
Unitholders are waiting on an independent report by Grant Samuel & Associates, which will be followed by a special meeting where they will vote on whether to support internalisation or dumping the manager in favour of a proposal put forward by Ascot Property Management to lead the change.
Investors will also have the option to remove the manager at no cost, though the independent directors see little chance of that succeeding as it needs trustee approval, and is unlikely to get it.