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


Precinct Properties lifts FY earnings by 14%

Precinct Properties boosts full-year earnings on acquisitions, higher rental income

By Tina Morrison

Aug. 20 (BusinessDesk) – Precinct Properties New Zealand, formerly known as AMP NZ Office, boosted full-year net operating income 14 percent as new buildings and higher occupancy levels increased rents.

Operating profit, which excludes some non-cash items and is used as the basis of dividend policy, increased to $58.3 million in the 12 months ended June 30, from $51.3 million a year earlier, the Auckland-based company said in a statement. Gross rental income rose 16 percent to $147.7 million.

Precinct has been securing new properties for its portfolio where it expects to be able to add value. It paid $50.4 million for Wellington’s Bowen Campus in 2012, and in the past financial year spent $90 million to buy the Downtown Shopping Centre and a further $103 million on the adjoining HSBC House, on Auckland’s central city waterfront.

“The previous three years were a time of steady consolidation and growth but over the last 12 months Precinct has moved to executive its strategy and achieve a new level of growth,” chief executive Scott Pritchard said in the statement. “As the company advances this strategy, it will now look to recycle out of non-core assets with the proceeds matched to development opportunities.”

Shares in Precinct rose 1.5 percent to $1.035, taking their gain this year to 3 percent.

Net operating income of 5.85 cents per share before performance fees is a touch ahead of the company’s forecast for 5.8 cents a share, and ahead of 2012’s 5.14 cents a share. Precinct forecast 2014 earnings of about 6.2 cents per share before fees.

The company will pay a fourth quarter dividend of 1.28 cents a share, taking its 2013 full-year dividend to 5.12 cents, up from 5.04 cents in 2012. Precinct forecast a 2014 dividend of 5.4 cents a share, consistent with its 90 percent payout ratio, and an increase on 2013’s 87.5 percent ratio.

“Following strategic acquisitions, Precinct is well positioned for future growth in earnings,” the company said.

Precinct expects market rental growth in Auckland to increase as vacancies fall while in Wellington the company expects moderate rental growth as clients focus on seismic performance.

The two Auckland acquisitions, along with its ANZ Centre redevelopment, increased bank borrowings 74 percent to $603 million. Interest expense rose 34 percent to $28.2 million, reflecting the Bowen and Downtown Shopping Centre purchases.

Precinct’s gearing ratio rose to 37.3 percent from 27 percent a year earlier although still within its banking covenant of 50 percent. The company’s gearing levels are not expected to increase materially from here, it said.

The company’s occupancy level rose to a four-year high of 97 percent, from 94 percent a year earlier while its weighted average lease term increased to 5.7 years from 5.5 years six months earlier.

Net income more than doubled to $157.5 million from $45.1 million as the company benefited from a $46 million revaluation gain on better rentals.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Commerce Commission: Appeals Record $2.25m Fine In Vodafone FibreX Case

The Commerce Commission has filed an appeal in the High Court against a record $2.25 million fine imposed on Vodafone NZ Limited (Vodafone) for its offending under the Fair Trading Act during its FibreX advertising campaign. While the sentence imposed in the Auckland District Court on April 14 was the largest-ever fine under the Fair Trading Act, the Commission will argue that it is manifestly inadequate... More>>

All District Health Boards: Historic Pay Equity Settlement

An historic agreement has been ratified that addresses a long-standing undervaluation of a workforce that is critical to the smooth running of our hospitals and the delivery of healthcare... More>>

MPI: Dry Autumn In Waikato And South Auckland Leads To Drought Classification Drought conditions affecting the primary sector in the Waikato and South Auckland were today classified as a medium-scale adverse event, enabling a package of support for farmers and growers... More>>

Barfoot & Thompson: Rents Up By Around 3% In Most Areas

The average weekly rent paid for homes in most areas of Auckland has risen by around 3 percent year-on-year. The figures for end March from more than 16,000 properties... More>>

DoC: Smeagol The ‘Gravel Maggot’ Leaves Its Rare Mark On The Remote West Coast
An extremely rare species of sea slug or ‘gravel maggot’ has been detected for the first time on a remote beach in South Westland... More>>

Immigration: Annual Net Migration Loss Of 7,300

The provisional net loss of 7,300 people in the year ended March 2022 was the lowest net migration for a March year since 2012, Stats NZ said today... More>>