NPT lifts 1H profit as it mulls hostile bid from Augusta Capital

Tuesday 22nd November 2016

NPT, the listed property investor, lifted first-half profit 2.3 percent and says it's still considering a hostile bid from rival Augusta Capital.

Operating profit before gains and losses, the preferred measure for property investors as it removes changes in the value of their portfolios, rose to $3.4 million in the six months ended Sept. 30 from $3.3 million a year earlier, the Auckland-based company said.

Gross rental income dipped 0.5 percent to $8.4 million, with revenue from its commercial properties down 11 percent to $1.9 million. Revenue from its industrial segment dipped 1.3 percent to about $2 million, while income from its retail properties rose 4.6 percent to $4.6 million.

Last week, NPT's board said it had appointed Northington Partners to consider a planned transaction put forward by minority shareholder Augusta Capital. Augusta is attempting to oust chairman John Anderson and directors Jim Sherwin and Tony Sewell, replacing them with its own chairman, Paul Duffy, and independents Bruce Cotterill and Allen Bollard.

Augusta is seeking a shareholder meeting to vote on the board, and would use the forum to put a proposal to the property group's shareholders for NPT to buy three buildings worth $329 million so Augusta could buy the management contract to build what it has described as "a meaningful listed entity that generates greater returns than are being realised."

NPT's board has said it was already considering other proposals around the time Augusta presented its one, and new parties have expressed interest since Augusta's proposal was disclosed to the market. In the first-half accounts today, the directors said they "will advise all shareholders on the offer and the group's course of action as soon as possible."

First-half net profit fell to $2.5 million, or 1.56 cents per share, from $5.1 million, or 3.13 cents, a year earlier, though last year's profit was bolstered by a $2.7 million increase in the value of its investment properties. That portfolio was valued at $169.8 million as at Sept. 30.

No valuations were carried out in the first half of the 2017 financial year, after the board reviewed each property and found there hadn't been a material change from valuations reached in March. The next valuations are due to be completed in March 2017 and will include developments the company has underway at Eastgate Shopping Centre in Christchurch and 99 Albert Street in Auckland.

Operating income rose 3.7 percent to $5.7 million, with operating profit at $3.4 million, slightly ahead of $3.3 million from the first half of the previous year.

The board declared a 0.9 cent dividend, with a Dec. 2 record date, payable on Dec. 26.

The company generated the most revenue in Christchurch, at $4.1 million, from $3.9 million in the year-earlier period. In Auckland, NPT generated $3.2 million in revenue, down 5.6 percent, while revenue from Hawkes Bay declined 0.9 percent to $1.1 million.

The shares last traded at 67 cents, and have dipped 0.7 percent this year.

BusinessDesk.co.nz

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