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Argosy Property lifts first-half profit 25% on occupancy boost, divestments

Wednesday 19th November 2014

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Argosy Property Fund lifted first half earnings 25 percent as New Zealand's fourth largest listed property investor boosted its occupancy rate and sold non-core assets.

Profit attributable to security holders rose to $37.6 million in the six months ended Sept. 30, from $30.1 million a year earlier, the Auckland based company said in a statement. Sales rose 8.7 percent to $43.8 million. Its occupancy rate rose to 99.1 percent from 97.3 percent a year earlier. 

The company is reducing exposure to retail properties and has identified $70 million worth of non-core properties or vacant land that it intends to sell. In the latest six months, it sold its Waitakere Mega Centre in Henderson, Auckland, for book value of $45.8 million in August, which it expects to settle in March next year, while settling $13.9 million worth of non-core divestments, and lifting the value of its overall portfolio 2.1 percent to $1.22 billion. 

Argosy is upgrading its New Zealand Post building in Wellington and finished the redevelopment of its 15 Stout Street building, also in Wellington, with the Ministry for Business, Innovation and Employment moving in in July, a lease it won in the government's new bulk tender process. It has been shortlisted for two further government leases, it said. 

"As the property market shows signs of continued buoyancy, our focus will remain firmly on adhering to our strategy," the company said. "Our goals for the remainder of the 2015 financial year are to continue to manage the portfolio’s occupancy and lease expiry profile, while searching for opportunities to improve the quality and balance of our property assets."

The board declared a 1.5 cents per share dividend for the September quarter, consistent with its first quarter, and expects to pay a full year dividend of 6 cents per share

Shares of Argosy last traded at $1.055 and have advanced some 15 percent since the start of the year, inline with the NZX 50 Index's 16 percent gain over the same period. The stock is rated an average of 'hold' based on the consensus of five analysts surveyed by Reuters, with a median price target of 99 cents.


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