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Property For Industry FY earnings fall 13%

Monday 20th February 2012

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Property For Industry, whose management contract was sold to DPF Management last year, reported a 13 percent decline in annual earnings as it lost tenants and downsized its portfolio.

Distributable earnings, the favoured profit measure for property investors because it strips out unrealised changes in the fair value of its portfolio, fell to $15.8 million in the 12 months ended Dec. 31, from $18.2 million a year earlier, the Auckland-based company said in a statement. Rental income fell 5.3 percent to $30.8 million, with total revenue down 4.3 percent to $31.1 million.

Net profit rose to $16.3 million, or 7.47 cents per share, from $10 million, or 4.64 cents per share.

PFI’s occupancy rate was 95.6 percent as at Dec. 31, down from 99.5 percent a year earlier, with the weighted average lease expiry at 4.17 years, up from 4.08 years at the end of 2010.

“A prolonged period of difficult trading conditions and global uncertainty has been testing for all New Zealand businesses, and the companies that occupy PFI’s properties are no exception,” general manager Nick Cobham said. “A key is focusing on earnings by addressing PFI’s current vacancy and upcoming lease expiries.”

Last month, AMP Capital Investors completed its sale of PFI’s management contract to DPF for an undisclosed sum. AMP Capital was paid a $1.9 million base management fee in 2011, but didn’t receive an incentive fee. The fee was broadly the same from the 2010 year.

PFI’s 49 property portfolio was occupied by 99 tenants, worth a total value of $355.9 million, as at Dec. 31. The investment property portfolio was valued at $350.7 million at the end of the reporting period, compared to $343.4 million a year earlier.

The board declared a quarterly dividend of 2.4 cents per share plus imputation credits of 0.3 cents per share. That takes the annual payout to 7.2 cents per share, or $15.6 million.

The shares were unchanged at $1.17 on Friday, and have gained 0.9 percent this year.

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