Augusta lifts annual earnings 17% as funds management, property deliver bigger returns

Friday 20th May 2016

Augusta Capital lifted annual earnings 17 percent as the listed property investor and fund manager eked out bigger returns from its two segments, with a higher occupancy rate and more syndication deals completed.

Distributable profit after tax, the preferred measure of many property investors which strips out unrealised movements in the value of their portfolios, rose to $5.7 million, or 6.5 cents per share, in the 12 months ended March 31, from $4.9 million, or 5.8 cents, a year earlier, the Auckland-based company said in a statement. Revenue climbed 24 percent to $17.1 million, driven by a 24 percent gain from its funds management business to $12.3 million.

"Augusta has continued to grow its business through diversification of its income from directly owned property to funds management revenue that is not as capital demanding," the company said in a statement. "We expect future income to provide improved shareholder returns and want to grow sustainable income to deliver enhanced dividends."

The firm diversified into funds management last year when it bought KCL Property and Investment Property Titles for a combined $15.4 million in cash and scrip, giving it about 165 properties to manage, with some $1.1 billion in funds under management.

Augusta's net profit rose 30 percent to $13.5 million, including a $7.1 million gain on the value of its property portfolio, which was valued at $106.8 million, including two buildings held for sale. The occupancy rate was 97 percent at the year-end, up from 94 percent in 2015, while the weighted average lease expiry was 6.3 years, compared to 5.9 years in 2015.

The company is looking to sell a third building after an earlier deal fell through in April, which it said would "create balance sheet capacity for future warehousing of assets and underwriting capability" and provide "funding capability in respect of new investor-ready sector specific funds."

The property segment delivered $5 million of earnings before interest and tax on net revenue of $6.7 million while the funds management business earnings of $4.8 million on revenue of $10.3 million.

Augusta's board had already declared its final quarterly dividend of 1.25 cents per share taking the annual payout to 5 cents, up from 4.75 cents in 2015.

The shares rose 0.9 percent to $1.13 and have gained 12 percent this year.

BusinessDesk.co.nz

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