UPDATED - DNZ Property Fund, listed on NZX in August, suffered a loss of more than $112.8 million in the six months to September.Its distributable profit is $9.8 million for the half year period, during which time it completed a $45 million capital raisin
UPDATED - DNZ Property Fund, listed on NZX in August, suffered a loss of more than $112.8 million in the six months to September.
Its distributable profit is $9.8 million for the half year period, during which time it completed a $45 million capital raising and initial public offering.
A significant contributing factor to the loss was the $31.76 million payout it made to its chief executive Paul Duffy and now-retired director Alistair Hassell to terminate the management contract they held.
Though expensive to achieve, its internalised management is one of its biggest selling points as it is currently the only listed company with it.
Former external manager Mr Duffy is still driving the company as its chief executive so internalising the management changed little about the way the company was run other than that it no longer had to pay Mr Duffy's management company management fees.
Its gearing is at 43.7% with $291.12 million of debt, after it repaid $81.86 million of debt during the six months to September 30. It has $59 million further banking facility it can draw down on in future if needed.
DNZ earned $27.84 million in rent during the six months to September, and also brought in $342,000 in fees for its management of Australian owned Diversified NZ Property Fund that owns the Remarkables Park Town Centre at Queenstown.
Its operated expenses were $7.78 million and its finance expenses came to $12.38 million. It also paid $2.17 million in withdrawn initial public offering expenses for
Assets sold during the six months to September raised a total of $31.3 million including 7-19 Croftfield Lane at Auckland for $7.85 million, two Lower Hutt properties for a combined total of $17.55 million, a Tauranga industrial property for $3 million and two sites at Auckland’s Airpark Business Centre for $2.9 million.
It has further sales lined up for $39.7 million due to settle in the next two years including 231 Bush Rd at Auckland for $7.1 million, 33-43 Jackson St at Wellington for $13.6 million, a Whangarei property for $13.5 million and a Tauranga building on the corner of Cameron Rd and First Ave for $5.5 million.
The value of its 379,934sq m 54 property portfolio remained unchanged at $669.6 million.
With occupancy of its portfolio at 96%, DNZ has an average weighted lease term of 4.4 years in its buildings.
The company has a 12000sq m warehouse and 1800sq m office underway at a 2.8ha site on O’Rorke Rd at Penrose due to be completed later this month, leased to Fletcher Building Laminex Group for twelve years with room for further development on the site.
Deferred tax of $86.3 million includes $69.5 million “relating to deferred taxation on buildings that will not be payable as the investment properties are held on capital account” according to DNZ’s results announcement.
DNZ said it expects to be prudent with its capital expenditure in the rest of the financial year to March 2011, look at more low risk design/build opportunities and consider recycling more assets to maintain earnings per share.
Its shares debuted on the NZX in August at 97 cents each and have steadily climbed to $1.20 each at press time.
Investors in DNZ will receive 2 cents a unit as a cash dividend for the September quarter, payable on December 10.
Jazial Crossley was the Qantas Media Awards 2010 Best Junior Business Newspaper Reporter and Property Institute of New Zealand Journalist Award winner 2010. Follow her on Twitter here.
