Interim Result for the six months ended 30 September 2014

Interim Result for the six months ended 30 September 2014

DNZ Interim Result for the six months ended 30 September 2014 12/11/2014

DNZ has released its Interim Report and Interim Result Presentation for the six months ended 30 September 2014. DNZ has delivered a positive result for the six months to 30 September 2014 with a 40.9% lift in Net Profit after Income Tax.
Key Points:

  • DNZ delivers 40.9% lift in Net Profit after Income Tax
  • Distributable profit(1) after income tax, of $16.8m or 5.64 cps ($13.8m or 4.97 cps in the prior comparable period) up 21.2%
  • 9.5 cps cash dividend guidance for the year ending 31 March 2015 (FY15) reconfirmed
  • 2.375 cps cash dividend for the second quarter (0.6504 cps imputation credits)
  • Independent valuations undertaken on 12 properties, resulting in a net increase of $10.73m or 1.4%(2)
  • Net Tangible Asset Backing (NTA) increased to $1.73 ($1.69 as at 31 March 2014)
  • Westgate Mall construction underway, due for completion in October 2015. Pre-leasing of over 80% of budget rental confirmed.

Chairman Tim Storey said
“This is another solid result and demonstrates that our strategy is delivering results to shareholders through improved earnings and distributions.”

 

CEO Peter Alexander added
“We have had an excellent half year with some good gains in leasing and cost management. Our major retail development at Westgate continues to progress well, with over 80% of budget rental now confirmed. Construction is on budget, and the development is on target to open in October 2015.”

Financial Performance Highlights (prior period 30 September 2013 figures in brackets)

  • Net rental income of $29.0m ($28.2m) up 2.7%
  • Corporate expenses of $3.0m ($4.1m) down 26.9%
  • Operating profit before other income and income tax of $20.1m ($17.6m) up 13.9%
  • Net profit after income tax of $26.0m ($18.4m) up 40.9%
  • Distributable profit1 before income tax, of $20.5m ($17.5m) up 17.2%
  • Distributable profit after income tax, of $16.8m or 5.64 cps ($13.8m or 4.97 cps) up 21.2%
  • 9.5 cps cash dividend guidance for the year ending 31 March 2015 (FY15) reconfirmed
  • 2.375 cps cash dividend for the second quarter (0.6504 cps imputation credits)
  • Record date 28 November 2014, payment date 12 December 2014
  • Dividend Reinvestment Plan remains suspended for FY15 second quarter dividend
  • Targeting 2.5% minimum annual dividend growth
  • Loan to value ratio (LVR) 36.3% (35.0%)

Portfolio Highlights (31 March 2014 figures in brackets)

  • Independent valuations undertaken on 12 properties, resulting in a net increase of $10.73m or 1.4%
  • Net Tangible Asset Backing (NTA) increased to $1.73 ($1.69)
  • 112 lease transactions completed over 121,292m2 for a total annual rental of $24.2m
  • FY15 lease expiries at 3.49% of the portfolio contract rental
  • FY16 lease expiries at 7.07% of the portfolio contract rental
  • Occupancy stable at 99.0% (99.5%)
  • Weighted average lease term (WALT) 5.4 years (5.5 years)

Developments and Divestments

  • Westgate Mall construction underway, due for completion in October 2015. Pre-leasing of over 80% of budget rental confirmed
  • Capital S.M.A.R.T. development at 25 O’Rorke Road, Penrose, Auckland, completed in October 2014
  • $50m divestment plan underway:
  • 968 Great South Road sold for $6.8m
  • Lot 84, Tauriko sold for $0.3m

Capital Management

  • The Loan to Value Ratio was 36.3% as at 30 September 2014
  • Post balance date, bank facility refinanced with existing banking partners extending the term of the two tranches of $200,000,000 each for a further one year, with Tranche A now expiring 31 October 2017, and Tranche B now expiring 31 October 2019. More favourable line fees and margin achieved.

Activity over the next 12 months will be strongly focused on delivering Westgate Mall – fully leased and open for business in October 2015. Progress on site is advancing well and leasing activity is on track with over 80% of budget rental now confirmed. We are also continuing to evaluate options for the future of Johnsonville Shopping Centre.

With a skilled management team in place, a strong vision for the future, and a plan to grow shareholder value, DNZ is well positioned to take advantage of growth opportunities both from within and outside the current portfolio.

Notes
(1). Distributable profit is a non-GAAP financial measure adopted by DNZ to assist DNZ and investors in assessing DNZ’s profit available for distribution. It is defined as a net profit/(loss) before income tax adjusted for non-recurring and/or non-cash items and current tax. Further information, including the calculation of distributable profit and the adjustments to net profit before income tax, is set out in note 7 to the interim consolidated financial statements for the six months ended 30 September 2014.
(2). The valuations of all properties disposed of during the 6 months from 1 April 2014 have been disregarded in this calculation.
 


 
Attachments provided to NZX:
1. NZX Appendix 1
2. NZX Appendix 7 – Dividend
3. DNZ FY15 Interim Results Presentation
4. DNZ FY15 Interim Report

Downloads:



For Further Information Please Contact:
Tim Storey, Chairman, DNZ Property Fund Limited
Mobile: 021 633 089 – Email: tim.storey@dnzproperty.com

Peter Alexander, Chief Executive Officer, DNZ Property Fund Limited
DDI: 09 913 1154 – Mobile: 0275 443 678 – Email: peter.alexander@dnzproperty.com

Jennifer Whooley, Chief Financial Officer, DNZ Property Fund Limited
DDI: 09 913 1150 – Mobile: 021 536 406 – Email: jennifer.whooley@dnzproperty.com

DNZ Property Fund Overview
DNZ Property Fund Limited owns one of New Zealand’s largest diversified investment property portfolios with $788.0 million (as at 30 September 2014) of commercial office, retail and industrial properties located in the main urban areas throughout New Zealand. As at 30 September 2014, DNZ Property Fund owned 45 properties with 286 tenants, a weighted average lease term (WALT) of 5.4 years and an occupancy rate of 99.00% over a net lettable area of 358,307m².

DNZ Property Fund Limited is a Portfolio Investment Entity in which investors hold shares and is managed by its own internal management team. DNZ is also the manager of Diversified NZ Property Fund Limited, a $115.9 million (as at 31 March 2014) commercial property fund.

DNZ’s top 10 tenants as at 30 September 2014: Bunnings, Progressive Enterprises (Countdown), Foodstuffs (PAK’nSAVE & New World), ASB, NZ Government, Fletcher Building, The Warehouse, Westpac, Meridian and Lion. These 10 tenants represent 50.2% of the Company’s total contract rental.

DNZ acquires 2% convertible notes
Extension of Bank Facility and renegotiation of line fees and margins