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Property for Industry earnings up 1.4%, portfolio value shrinks for second year

Monday 22nd February 2010

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Property for Industry, the investment group managed by AMP Capital Investors, posted a 1.4% gain on its full-year earnings as it managed to keep properties tenanted through 2009. Still, the value of its portfolio shrank for the second straight year, and the shares sank 5.3% to $1.07 in trading this morning.

Net operating profit after tax for distribution, the favoured measure for property investors, rose to $15.9 million, or 7.46 cents per share, in the 12 months ended Dec. 31, from $15.7 million, or 7.42 cents, a year earlier.

That’s a little short of the $16.2 million forecast by Forsyth Barr analyst Jeremy Simpson.

The company made a net loss of $12.5 million, smaller than 2008’s loss of $31.9 million.  

PFI sold three properties through 2009 for some $21.6 million as it sought to repay debt, and as a result, revenue shrank 3.2% to $31.4 million. The value of the company’s portfolio shrank $28.4 million to $363.1 million.  

“Despite challenging market conditions and a reduction in rental income following the company’s property sales, to have increased net profit and earnings is a very pleasing outcome,” said general manager Ross Blackmore in a statement.  

Of the 16 leases that expired through 2009, new tenants had been found or the existing tenants had extended their terms, the company said.  

PFI’s gearing ratio rose to 33.2% from 28.9% in 2008, and it drew down $122 million of its $140 million facility with Bank of New Zealand.  

“The group has sufficient headroom to enable it to conform to covenants on its existing borrowings,” the company said in a note to the accounts.  

PFI will pay a dividend of 2.245 cents a share plus imputation credits of 0.439 cents. The annual net dividend of 7.18 cents was unchanged from 2008.  

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