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Headline profit up but distributions down for Goodman

Higher tax reduced listed Goodman Property Trust’s distributable earnings to $74.8 million, down from $78m last year.

The annual result for the year ending March 31 reflected the government’s removal of building depreciation deductions from April last year.

This final quarterly payment will result in a full-year cash distribution of 6.25c per unit compared to 7.74c a unit last year.

The units are currently trading at $1.03c each.

The payout ratio is 80.4% of earnings.

But adjustments for non-cash items - including deferred tax, changes in the cashflow hedge reserve and fair value changes in interest rate derivatives - saw the bottom line or headline result after tax ahead by $3.8m to $40.5m ($36m last year).

The portfolio of industrial properties recorded a 1.2% devaluation overall.

The movements in non-cash items have no impact on distributable earnings but they contribute to a reduction in adjusted net tangible assets from 97.3c per unit last year (and $1 the previous year) to 95.4c this year.

Portfolio occupancy stands at 96%, with an average lease term of 5.4 years.

The company developed almost 50,000sq m of new projects.

Super Cheap Auto has been the largest of these, with the Australasian automotive parts supplier committing to a new distribution facility at Savill Link in Otahuhu, south Auckland.

At 20,000sq m, it is the largest design-build project undertaken by Goodman Property since 2006 and one of the largest industrial developments completed in Auckland over the last 10 years.

There has been further success since balance date with a new commitment from Frucor Beverages at M20 Business Park.

“The current business environment is likely to continue over the next 12 months with only modest economic growth anticipated," chief executive John Dakin says.

"The trust is expected to deliver similar results under these conditions, maintaining its tax paid distribution at 6.25c per unit or around 80% of distributable earnings for the 2013 financial year.”

More by Chris Hutching