DNZ full year distributable profit $21.9m

Monday 23rd May 2011

DNZ Property Fund, which listed on the NZX last August, reported a distributable profit of $21.9 million for the year to the end of March.

That was down from $24.1 million a year earlier, but up from the $19.2 million forecast in last July's offer document.

Asset sales during the year were worth a gross $72.2 million. Those sales were at or close to valuations, despite difficult market conditions, with net proceeds used to repay bank debt, DNZ said.

Earlier this month DNZ approached the Argosy Property Trust with a proposal to merge Argosy into DNZ.

DNZ said the move was an alternative to Argosy's proposal to internalise the rights to manage the Argosy trust, with a proposed payment of $32.5 million to trust manager Onepath (NZ), a wholly-owned subsidiary of ANZ.

DNZ chairman Tim Storey said capital management initiatives during the year ensured DNZ was well capitalised and well within its banking covenants.

"The steps we've taken position the company strongly going forward and allow us to explore opportunities that become available, such as the recent Argosy proposal," he said.

DNZ said that during the year 188 lease transactions were completed over 218,205sq m of net lettable area, annualised rental growth from rent reviews was 3.8%, and the occupancy rate was 98%.

The annual independent market valuation of the property portfolio showed a reduction in the value by 1.9%, or $11.8 million, to $637.7 million, excluding acquisitions and divestments.

The value of its office portfolio fell 4.4% or $11.7 million, with Wellington offices contributing 69 percent to the decline with a 6.3% or $8.1 million fall, DNZ said.

The company reported an after tax loss of $35.1m, including one-off items such as the termination payment for its management contract, and non-cash items such as deferred tax and unrealised revaluation movements.

Storey said the key benefits and drivers of listing were to provide liquidity and an improved share price.

The share price rose from 97c at listing to $1.24 at March 31. The shares last traded at $1.31 on Friday.

A dividend of 2c per share was to be paid for the fourth quarter, bringing the total cash distribution to 7.3c per share for the 2011 financial year. On an annualised basis, which excluded the first quarter dividend paid before listing, that equated to 8cps.

A minimum dividend of 8cps is expected to be paid for the 2012 financial year.

NZPA

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