Goodman Property first-half profit drops, reflecting year-earlier revaluation gains

Wednesday 11th November 2015

Goodman Property Trust, New Zealand's largest listed property investor, posted a 20 percent drop in first-half profit, after the year-earlier period was boosted by a revaluation gain on its portfolio.

Profit slipped to $48.4 million, or 3.8 cents per unit, in the six months ended Sept. 30, from $60.2 million, or 4.77 cents, a year earlier, the Auckland-based company said in a statement. Profit in the first half of last year was boosted by a $13.7 million revaluation gain on investment properties. Its first-half rental revenue slipped 4 percent $73.1 million.

Goodman is selling assets to fund new development, with as much as $150 million of new projects in train for this financial year which it expects to improve earnings. It has $72.1 million of its properties contracted for sale and in the first half of the year announced five new development projects worth a total $72.6 million which are expected to generate $5.7 million of annual rental income and deliver valuation gains of 10-15 percent when completed.

"An accelerated development programme, funded through asset recycling, is an important component of an overall strategy that is positioning GMT for sustainable long-term growth," said John Dakin, chief executive of Goodman (NZ), the trust's manager. "The trust is on target to deliver a strong full-year profit with asset management initiatives, development completions and robust investment markets expected to contribute to a positive revaluation gain.”

Goodman's pretax distributable earnings, which strip out movements in the value of its property portfolio, increased 2.9 percent to $57.1 million, or 4.64 cents per unit. It reaffirmed its full-year forecast for about 9.4 cents per unit.

That's likely to boost cash distributions to unitholders to 6.65 cents per unit, from 6.45 cents last year, it said.

Its units advanced 0.8 percent to $1.22. Prior to today, the units had advanced 6.1 percent so far this year.

BusinessDesk.co.nz

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