FY15 Annual Results

FY15 Annual Results

DNZ FY15 Annual Results 21/05/2015

FY15 Annual Results

 

Key Points:
  • DNZ delivers 13.1% lift in operating profit before other income and income tax of $39.6m ($35.0m in the prior year)
  • Distributable profit(1) after income tax of $32.1m or 10.80 cps ($27.7m or 9.67 cps in the prior year), up 15.9%
  • Cash dividend increased from 9.00 cps for the year ended 31 March 2014 (FY14) to 10.25 cps for FY15, up 13.9%
  • 3.125 cps cash dividend for the fourth quarter for FY15 (0.6583 cps imputation credits)
  • Targeting 2.5% minimum annual dividend growth, with an expected cash dividend of at least 10.50 cps for FY16
  • Net 5.1% property portfolio valuation increase on a like-for-like basis(2)
  • Net Tangible Asset Backing (NTA) increased to $1.81 ($1.69 as at 31 March 2014), up 7.1%

DNZ has released its Annual Report and Annual Result Presentation for the year ended 31 March 2015. DNZ has delivered a positive result for the year ended 31 March 2015, with a 13.1% lift in operating profit before other income and income tax of $39.6m.

Chairman Tim Storey said, “DNZ has delivered a great return for our shareholders and has surpassed our previous year’s result.

“As a result, the distributable profit per share is well ahead of last year’s results and is consistent with our annual goal of dividend growth. Overall, it has been a very successful year for the Company with a particularly solid profit result.”

Chief Executive Peter Alexander added, “DNZ has delivered a positive result for the year in favourable market conditions and with the support of a leaner, more efficient business.”

Financial Performance Highlights

    (prior period 31 March 2014 figures in brackets)

  • Net rental income of $57.2m ($57.4m), down 0.2%
  • Corporate expenses of $6.1m ($9.0m), down 32.2%
  • Operating profit before other income and income tax of $39.6m ($35.0m), up 13.1%
  • Net profit after income tax of $68.8m ($41.6m), up 65.6%
  • Distributable profit(1) before income tax of $40.3m ($35.0m), up 15.1%
  • Distributable profit after income tax of $32.1m or 10.80 cps ($27.7m or 9.67 cps), up 15.9%
  • Cash dividend increased from 9.00 cps for the year ended 31 March 2014 (FY14) to 10.25 cps for FY15, up 13.9%
  • 3.125 cps cash dividend for the fourth quarter (0.6583 cps imputation credits)
  • Record date 5 June 2015, payment date 19 June 2015
  • Dividend Reinvestment Plan remains suspended for FY15 fourth quarter dividend
  • Targeting 2.5% minimum annual dividend growth, with an expected cash dividend of at least 10.50 cps for FY16
  • Loan to value ratio (LVR) 35.1% (35.0%)

Portfolio Highlights

    (31 March 2014 figures in brackets)

  • Net 5.1% property portfolio valuation increase on a like-for-like basis(2)
  • NTA increased to $1.81 ($1.69), up 7.1%
  • 203 lease transactions completed over 212,836m2 for a total annual rental of $40.4m
  • FY16 lease expiries at 5.81% of the portfolio contract rental (post balance date transactions have reduced this to 3.75%)
  • FY17 lease expiries at 13.04% of the portfolio contract rental
  • Occupancy at 96.6% (99.5%)
  • Weighted average lease term (WALT) 5.1 years (5.5 years)

Developments and Divestments

  • NorthWest Shopping Centre due for completion in October 2015. As at 31 March 2015, construction 70% completed and 100 tenancies confirmed. Forecast valuation on completion $170m
  • Review of redevelopment options for Johnsonville Shopping Centre, Wellington, hoped to be completed by late 2015
  • $80m divestment plan underway. Divested the following assets (total $32m):
  • 968 Great South Road, Auckland
  • Lot 84, Tauriko Industrial Estate, Tauranga
  • 12 Tyers Road, Wellington
  • 13 Jarden Mile, Wellington
  • 709 Te Rapa Road, Hamilton
  • 8 Rockridge Ave, Auckland

Capital Management

  • Bank facility refinanced during the year 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
  • Weighted average cost of debt (including margin & line fees) 5.60% as at 31 March 2015

Mr Alexander said, “DNZ looks forward to a sustained period of progressive growth. The completion of NorthWest Shopping Centre will be a key activity in the coming year and will have a very positive effect on earnings growth. We will continue our targeted divestment programme which, together with the flexibility and capacity in our balance sheet, will enhance our performance and provide better returns in accordance with our strategy.

“DNZ continues to have an acute focus on key areas that will deliver the greatest returns to shareholders in the 2016 financial year and beyond.”

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 6 to the audited financial statements for the year ended 31 March 2015.
(2) The valuations of all properties disposed of during the 12 months from 1 April 2014 have been disregarded in this calculation. The portfolio was independently valued at $780.2 million as at 31 March 2014 and $872.4 million as at 31 March 2015.
 


 
Attachments provided to NZX:
1. NZX Appendix 1
2. NZX Appendix 7 – Dividend
3. DNZ FY15 Annual Results Presentation
4. DNZ FY15 Annual 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 $872.4 million (as at 31 March 2015) of commercial office, retail and industrial properties located in the main urban areas throughout New Zealand. As at 31 March 2015, DNZ Property Fund owned 41 properties with 281 tenants, a weighted average lease term (WALT) of 5.1 years and an occupancy rate of 96.6% over a net lettable area of 334,694m².

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 31 March 2015: Bunnings, Progressive Enterprises (Countdown), Foodstuffs (PAK’nSAVE & New World), ASB, NZ Government, The Warehouse, Fletcher Building, Westpac, Meridian and Lion. These 10 tenants represent 52% of DNZ’s total contract rental.

Notice of Meeting and Proxy Form
Annual Meeting and Director Nomination Closing Date