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Property for Industry Limited (NZX: PFI) Announces Record Interim Results

Friday 20th August 2021

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Property for Industry Limited today announced record interim results for the six months ended 30 June 2021.

“PFI’s significant and quality portfolio, execution of the Company’s refreshed strategy, and buoyant market conditions have generated a record interim result. Our balance sheet is in great shape, and we have high levels of liquidity to continue to execute on our priorities and to deliver strong, stable returns.” says PFI Chief Executive Officer, Simon Woodhams.

Record interim result

Profit after tax for the interim period totalled $273.5 million (54.46 cents per share), up from $15.6 million (3.14 cents per share) in the prior interim period. A $248.2 million fair value gain on investment properties, as compared to a $7.8 million fair value loss in the prior interim period, was the main contributor to the Company’s record interim profit.

Net rental income of $45.9 million was up $4.3 million or 10.4% on the prior interim period, with positive leasing activity and acquisitions both contributing $2.6 million each to this increase.

This increase in net rental income has contributed to an increase in FFO earnings to 5.36 cents per share, up 0.58 cents per share or 12.1% ahead of the prior interim period. AFFO earnings of 4.71 cents per share were up 0.92 cents per share or 24.3% when compared to the prior interim period, with a reduced level of maintenance capex also contributing to that increase.

That being the case, the PFI Board resolved to pay a second quarter interim cash dividend of 1.8000 cents per share. The dividend will have imputation credits of 0.6088 cents per share attached and a supplementary dividend of 0.2763 cents per share will be paid to non-resident shareholders. The record date for the dividend is 27 August 2021, and the payment date is 7 September 2021. The dividend reinvestment scheme will operate with a discount of 2%.

The second quarter dividend will take cash dividends for the interim period to 3.60 cents per share, in line with the prior interim period, resulting in an FFO dividend pay-out ratio of 74% (H1 2020: 81%) and an AFFO dividend pay-out ratio of 84% (H1 2020: 102%, refer Appendix 3).

Increased dividend targeted and revised dividend policy

On 6 May, the Company noted that results for the year to date, combined with the positive impact of the acquisition of 44 Noel Burnside Road, meant that the PFI Board was reviewing both the dividend policy and total cash dividends for the 2021 financial year.

Progression of the Company’s strategy, combined with positive results for the year to date and buoyant market conditions, now mean that the PFI Board expects to declare cash dividends of 7.90 cents per share for the 2021 financial year, at the upper end of the guidance range of 7.85 - 7.90 cents per share.

Cash dividends of 7.90 cents per share are anticipated to result in a dividend pay-out ratio below 80% of forecast FFO and 95% of forecast AFFO. Accordingly, the PFI Board has revisited the Company’s dividend policy.

To ensure PFI can continue to grow dividends, whilst at the same time pursuing strategic and value enhancing initiatives, the PFI Board has decided to amend the Company’s dividend policy to distribute between 90% to 100% of AFFO on a rolling three-year historic average basis. A copy of the revised dividend policy can be found in Appendix 4.

Cash dividends of 7.90 cents per share are anticipated to result in a dividend pay-out at the mid-point of this revised dividend policy range of 90% to 100% of AFFO on a rolling three-year historic average basis.

This guidance is subject to there being no material adverse changes in conditions or unforeseen events, including no material tenant failures or further material COVID-19 restrictions, other than those in place as at the date of this announcement.

Please see the links below for details

[1] PFI – NZX Annual Results Announcement – 6ME 30 June 2021

[2] PFI - NZX Form - Results Announcement - 6ME 30 June 2021

[3] PFI - NZX Form - Distribution Notice - 6ME 30 June 2021

[4] PFI - NZX Interim Results Presentation - 6ME 30 June 2021

[5] PFI - NZX Interim Financial Statements - 6ME 30 June 2021

Source: Property for Industry Limited

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