Monday 22nd February 2021
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Property for Industry Limited today announced robust results for the year ended 31 December 2020.
“Against a backdrop of testing conditions, the Company performed exceptionally well. Specifically, our conservative gearing and ability to access liquidity worked to our advantage. We took decisions on the basis of a well-defined strategy but retained the flexibility to change course. The Board is pleased to have emerged well placed to respond to opportunities as they arise. At the same time, we have grown cash returns for our investors while supporting those tenants most in need,” says PFI Chairman, Anthony Beverley.
Robust annual result
Profit after tax for the year totalled $113.5 million (22.70 cents per share), down from $176.3 million (35.35 cents per share) in the prior year. A $72.5 million fair value gain on investment properties, as compared to a $125.2 million fair value gain in the prior year, was the main contributor to this reduction in profit.
FFO earnings of 9.67 cents per share were 0.60 cents per share or 6.6% ahead of the prior year. AFFO earnings of 8.03 cents per share were up 0.24 cents per share or 3.1% when compared to the prior year.
That being the case, the PFI Board resolved to pay a fourth quarter cash dividend of 2.2500 cents per share, up 0.1000 cents per share from the dividend paid in the prior year.
The dividend will have imputation credits of 0.5141 cents per share attached and a supplementary dividend of 0.2333 cents per share will be paid to non-resident shareholders. The record date for the dividend is 1 March 2021, and the payment date is 10 March 2021.
As was the case with the third quarter dividend, the dividend reinvestment scheme (DRS) will operate with a discount of 2%. The last date for receipt of an application for participation in the DRS is one business day after the record date, being 2 March 2021. Further details can be found in the DRS Offer Document, which is available on PFI’s website: https://www.propertyforindustry.co.nz/investor-centre/dividend-information/dividend-reinvestment/.
The fourth quarter dividend will take cash dividends for the full year to 7.70 cents per share, an increase from the prior year of 0.10 cents per share, resulting in an FFO dividend pay-out ratio of 80% (2019: 84%) and an AFFO dividend pay-out ratio of 96% (2019: 98%, refer Appendix 2).
Strong balance sheet
Net tangible assets (NTA) per share increased by 15.4 cents per share or 7.5% from 205.5 cents per share as at the end of 2019 to 220.9 cents per share as at the end of the year.
In response to the risks associated with the COVID-19 pandemic, in March 2020 PFI secured a new $50 million liquidity facility from the Commonwealth Bank of Australia, New Zealand Branch (CBA). In November 2020, the facility was extended to 19 March 2022 and increased from $50 million to $100 million. The extended and increased facility was in addition to the bonds and syndicated bank facility PFI already had in place.
“Our portfolio revaluation uplift has made the Company more valuable. At the same time we have shored up our ability to access cashflow to continue to secure quality industrial properties in line with our strategy,” says PFI Chief Finance and Operating Officer, Craig Peirce.
The weighted average term to expiry of PFI’s bonds and bank facilities stands at 2.8 years as at the end of the year, and the Company ended the year with gearing of 30.0% and an interest cover ratio of 4.1 times.
Craig Peirce concludes: “High levels of liquidity from a diverse range of sources, ultra-low interest rates and headroom to covenant levels provide PFI with a strong funding position, and the contracted divestment of Carlaw Park will provide further funding flexibility.”
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