Goodman Property annual earnings rise 4.2% on cheaper funding costs, new developments

Thursday 19th May 2016

Goodman Property Trust lifted annual earnings 4.2 percent as the country's second-biggest listed property investor benefited from cheaper interest costs.

Pretax operating earnings rose to $117 million, or 9.41 cents per unit, in the 12 months ended March 31 from $112.3 million, or 9.16 cents, a year earlier, the trust's manager, Goodman (NZ), said in a statement. Finance costs dropped 15 percent to $20.5 million in the year, while net rental income slipped 0.7 percent to $133.8 million.

The property investor has been overhauling its portfolio, selling more than $300 million of assets and signalling more than $350 million of new development projects over the past three years, which it says will deliver the biggest return to unitholders.

"Following the completion of the current work book, the trust's land weighting will reduce to just 8.3 percent of total property assets while investment in the favoured Auckland industrial and business park sectors will increase to 67.8 percent," Goodman (NZ) chief executive John Dakin said. "With stable property market fundamentals and low interest rates stimulating business growth, the immediate outlook for GMT remains positive."

Goodman's net profit jumped 45 percent to $247.9 million, including a $145.8 million gain in the value of its investment property portfolio. The property investor didn't provide distributable earnings, which had been the favoured measure as it stripped out unrealised movements in the portfolio and is directly linked to what's paid to investors.

The trust paid 6.65 cents per unit in the year, up from 6.45 cents a year earlier, and the board expects to at least match that return in 2017.

Pretax operating earnings are expected to rise to 9.5 cents per unit in 2017.

Goodman's property portfolio was valued at $2.23 billion as at March 31, up from $2.1 billion a year earlier, while net borrowings increased 8.5 percent to $753.2 million.

The property investor's occupancy rate was at 97 percent with a weighted average lease term of 5.7 years, up from 96 percent and 5.1 years in 2015.

Goodman's base management fee paid in units was $6.3 million in the year, down from $6.4 million in 2015.

The units last traded at $1.37 and have gained 11 percent so far this year.

BusinessDesk.co.nz

Comments from our readers

No comments yet