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DNZ boosts annual earnings 27%, flags dividend rise in 2013

Wednesday 23rd May 2012

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NZX-listed DNZ Property Fund has lifted annual earnings 27 percent and signalled a bigger return to shareholders in the coming year.

Distributable profit, property investors' favoured way of measuring earnings since unrealised changes in property values are excluded, rose to $27.8 million, or 11.22 cents per share, in the year to March 31. That compares with the previous year's earnings of $21.9 million, or 9.6 cents per share, the company said in a statement.

Net profit, including portfolio revaluations, was $20.8 million, compared to a net loss of $35.7 million in a year when the company took a hit on its portfolio value and paid $31.8 million to bring its management contract in-house.

Directors declared a final quarter dividend of 2.2 cents, taking the full-year payment to 8.5 cents per share, and expect to pay out 9 cents per share in 2013, following a change in distribution policy.

"DNZ is well-placed with high occupancy rates and long-term contracted rental income streams," chairman Tim Storey said. "We will also continue to look for new opportunities and other initiatives to add value and further enhance the quality of our portfolio, either through investment in new properties or through our on-going proactive management of our existing tenants and lease tenure within the portfolio."

The shares rose 0.4 percent to $1.45 in trading today, and have climbed 49 percent since listing on the stock exchange in August 2010, outpacing the 15 percent gain in the NZX 50 Index over the same period.

DNZ lifted annual rental income to $52.9 million from $52 million across its 51 properties, occupancy rates rose to 98.7 percent from 97.9 percen, and the weighted average lease term increased to 5.4 year from 4.3 years in 2011.

The value of the property investor's portfolio rose to $658.3 million as at March 31 from $638 million a year earlier, and its bank borrowings increased to $267.3 million from $252.9 million, giving it a loan-to-value ratio of 40.6 percent.

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