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13.7% lift in profit and potential expansion of Sylvia Park

13.7% lift in profit and potential expansion of Sylvia Park

18 May 2015 | FLLYR

Kiwi Property today announced a very positive annual result for the year ended 31 March 2015, capping off a year of transformational change in which the business moved from a trust to a company structure and rebranded as Kiwi Property.
In its first full year of operation as an internally managed entity, the Company produced an after tax profit [NOTE 1] of $115.2 million for the year ended 31 March 2015, an increase of +13.7% on the prior year.

NOTE 1: Refer to Appendix 1 of this announcement for definitions.

Operating profit before tax [NOTE 1] was $89.0 million, up 13.1% on the prior year and a record in our 21-year history. This was driven by positive leasing, rental growth and occupancy outcomes across our portfolio, cost savings delivered through internalisation and corporatisation, and interest savings secured through capital management initiatives.

NOTE 1: Refer to Appendix 1 of this announcement for definitions.
Chair of the board, Mark Ford, said: “The 2015 financial year was another period marked by positive change for Kiwi Property. In December 2014, our investors overwhelmingly approved our proposal to move from a trust to a company structure.”

“Internalisation of management in December 2013, coupled with corporatisation in December 2014, is enabling us to deliver benefits to shareholders, including cost savings. I am pleased to report that we have exceeded our pre-tax net expenditure savings target of $8 million per annum, as projected at the time of internalisation. Our business is now underpinned by both a lower cost management platform and by a strategy that is singly focused on achieving our shareholder goals.”

“Shareholders will receive a full-year cash dividend of 6.50 cents per share, up from 6.40 cents per share a year ago. Looking to the 2016 financial year, the Company is well positioned relative to its shareholder goals. We project an increased dividend of 6.60 cents per share for the 2016 financial year, subject to a continuation of reasonable economic conditions,” said Mr Ford.

Commenting on Kiwi Property’s future plans, Chief Executive, Chris Gudgeon, said: “Our investment strategy favours the Auckland region and we are particularly excited about the potential expansion of Sylvia Park as part of our town centre vision for that site. We are currently evaluating a 20,000 sqm retail expansion, at an estimated cost of $150 million and with a possible opening date in 2018. This would accommodate new international retailers and additional specialty and department stores. The redeveloped centre would offer a world-class experience and cement the centre’s position as Auckland’s most attractive retail destination. We are also investigating the development of high profile office space, tapping into our onsite rail and bus public transport links and benefitting from the amenity and services on site. The initial 7,500 sqm building under consideration is estimated to cost $45 million. Any retail expansion or office development will be subject to commercial viability.”

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