NZL’s FY25 Result Delivers AFFO And Dividend Growth

New Zealand Rural Land Co (NZL.NZX) today announced its financial result for the year ended 31 December 2025, reporting consolidated net profit after tax (NPAT) of $7.9 million and adjusted funds from operations (AFFO) of $7.9 million, $0.9 million higher than FY24 (+12.3%) excluding earnings from properties with put/call arrangements in place.

Managing Director of New Zealand Rural Land Management Richard Milsom said the result reflects steady execution of NZL’s strategy and reinforces its positioning as a disciplined, yield-focused land vehicle.

“AFFO per share increased 9.9% to 5.43 cents per share and we have increased the full year dividend to 4.91 cents per share. That progression reflects the strength of our CPI-linked lease model, the quality of our tenant base and our continued focus on per-share outcomes.

“During the year we delivered portfolio value growth, reduced gearing to 29.4% and maintained 100% occupancy across long-term leases. Those fundamentals underpin sustainable earnings and dividend growth for shareholders.

“At the five-year mark, the board commissioned an independent capital review to ensure our strategy remains aligned with investor expectations. The review confirmed that NZL is primarily valued for the sustainability and reliability of its cash yield, and we have refined our framework accordingly.

“The rural sector has played a leading role in New Zealand’s recovery and continues to perform strongly, providing a strong foundation for ongoing investor confidence. We remain constructive on its medium-term prospects and continue to evaluate opportunities to invest in productive rural assets,” said Milsom.

FY25 Highlights

• AFFO grew from 4.94cps in FY24 to 5.43cps in FY25 (+9.9%). NZL forecasts FY26 AFFO of between 5.65 cps and 5.99cps (FY26 includes further CPI linked rental adjustments) • CPI linked rental increases of +13.8% on 18.2% of NZL’s portfolio took effect in June 2025. A further 32.3% of NZL’s portfolio was subject to a ~+2.5% increase in early 2025 • WALT was 11.6 years at FY25 year end a decrease of -7.2% from 12.5 years at FY24 end • 17,077 hectares of rural land now owned, a decrease of -2.4% from FY24

• Purchased 305 hectare, highly productive dairy property in Canterbury. NZL sold two pastoral farms at above book value/most recent valuation for $10.9 million. • Net asset value per share has grown from $1.25 at IPO to $1.609 (at 31 December 2025) • Gearing lowered to 29.4% with 96.0% of borrowing hedged

• NZL has adopted a revised dividend policy targeting distributions of 90% - 100% of AFFO, paid quarterly. NZL will pay a final dividend of 2.75 cps (100% of AFFO earned in the second half of the year) for a full year dividend of 4.91 cps equivalent to 90.5% of FY25 AFFO. The final dividend will be paid in April 2026

• NZL has elected to suspend its Dividend Reinvestment Programme (DRP) and will confirm whether the DRP will apply at each dividend announcement, having regard to the Group’s capital requirements and any potential dilution to earnings and NTA

• NZL’s on-market share buyback programme remains in place. No shares were repurchased during the period. The programme remains in place and provides the Board with flexibility to repurchase shares should market conditions and capital requirements warrant.

Capital Review

The independent capital review, undertaken by KPMG, considered market feedback, valuation drivers and capital management settings. It reinforced that NZL is predominantly valued by investors on the sustainability and reliability of its cash yield, with asset values and NTA viewed as secondary considerations.

The review also highlighted the importance of scale and liquidity, provided growth enhances per-share returns.

Following the review, NZL has endorsed a refined capital management framework under which it will:

• Target quarterly distributions of between 90%–100% of AFFO;

• Raise equity only where forecast to be accretive to AFFO per share; • Pursue scale to improve liquidity and market relevance, but not at the expense of yield or per-share returns;

• Assess share buybacks and alternative uses of capital using a yield-based framework.

This framework is intended to provide clarity and predictability for shareholders, while maintaining flexibility to allocate capital in a disciplined manner.

Dividend

NZL will pay a final dividend of 2.75 cps in April 2026, representing approximately 100% of AFFO earned in the second half of the year. Total FY25 dividends of 4.77 cps equate to approximately 90.5% of full year AFFO.

Under the revised dividend policy, NZL intends to make regular quarterly distributions targeting 90%–100% of AFFO.

NZL has elected to suspend its Dividend Reinvestment Programme (DRP) and will confirm whether the DRP will apply at each dividend announcement, having regard to the Group’s capital requirements and any potential dilution to earnings and NTA.

Portfolio performance

NZL now owns 17,077 hectares of high-quality rural land, fully occupied across nine tenants with a weighted average lease term (WALT) of 11.6 years (by lease value). While hectares owned and WALT have modestly reduced following portfolio recycling during the year, the Company maintains 100% occupancy and meaningful sector and tenant diversification.

The portfolio is diversified across dairy (51% of lease income), forestry (31%), horticulture (8%) and support land (10%).

CPI adjustments during FY25 increased portfolio lease value by approximately $740,000 per annum, reflecting the embedded inflation protection within NZL’s lease structures.

By owning only the underlying land, NZL remains insulated from on-farm operating costs while retaining exposure to long-term land value growth.

Balance sheet

Gearing reduced to 29.4% at year end, with 96% of borrowings hedged. These settings support earnings stability and balance sheet resilience.

Outlook

NZL forecasts FY26 AFFO of between $8.25 million and $8.75 million (5.65–5.99 cps), excluding earnings from properties with put/call arrangements in place.

The outlook for New Zealand agriculture remains constructive, supported by improving commodity prices and positive land value trends. NZL’s CPI-linked leases provide ongoing rental growth and underpin the sustainability of its dividend profile.

The Board remains focused on disciplined execution of NZL’s refined yield-focused strategy, maintaining capital discipline and delivering sustainable per-share dividend growth.

A detailed results presentation is available at:

https://www.nzrlc.co.nz/reports-presentations

© Scoop Media