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NPT full-year distributable profit rises 1% on little-changed rental income

Monday 23rd May 2016

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NPT, the listed property investor whose managing director Kerry Hitchcock left suddenly in March, reported a 1 percent gain in full-year distributable profit and said it will lift its dividends for 2017, a year in which it is focused on keeping a lid on corporate and management expenses.

Distributable profit, which excludes fair value changes and lease adjustments, was $6.1 million in the 12 months ended March 31, from $6 million a year earlier. Net rental income rose 0.4 percent to $11.5 million in the year, while an unrealised gain in the fair value of investment properties contributed to a 32 percent increase in net profit to $8.4 million.

The Auckland-based company named general manager property Tony Osborne as acting chief executive after the unexpected departure of Hitchcock, who was first tapped as acting CEO in 2011 and made managing director in May 2013. The property investor has been focusing on its Eastgate Shopping Mall in Christchurch, where it is adding a Restaurant Brands store and an outlet for The Loft, a cluster of health and wellbeing services that will take up space that's been vacant since the February 2011 earthquake.

NPT itself moved into its new head office in its own AA Centre in Auckland, in what it intends to be a "showcase" for the Auckland property it is refurbishing floor by floor. The building is currently 100 percent occupied but with a relatively short weighted average lease term (walt) of 2.7 years, compared with a portfolio-wide walt of 5.4 years.

The AA Centre is currently valued at $36.2 million, second to Eastgate on $58 million and ahead of its Roskill Centre site in Auckland on $35 million. The value of its portfolio rose 2 percent to $169.4 million as at March 31.

"Further repositioning of the AA Centre will continue across the year as NPT looks to take advantage of the strong office leasing market in the Auckland CBD," the company said. NPT's balance sheet has enough capacity "to complete our capital works programme and add to the portfolio should a suitable opportunity arise."

NPT has a $70 million bank facility, which had $22 million undrawn as at March 31, it said.

It declared a fourth quarter dividend of 0.875 cents a share, meeting its guidance of payments for the full year of 3.5 cents. It is forecasting payments for 2017 will rise 2.7 percent to 3.7 cents a share.

NPT shares rose 1.5 percent to 69 cents and have gained 6.2 percent in the past 12 months.

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