Argosy lifts profit after charges – property income falls
Argosy Property reported a jump in full-year profit after earnings in the previous year were eroded by the costs of internalising its management contract. Net property income fell 1.8 percent.
Profit was $39.2 million in the 12 months ended March 31, from $1.9 million a year earlier, when it spent $20 million internalising its management contract.
Distributable earnings, the favoured profit measure for property investors as it strips out unrealised value changes in property portfolios, rose to $40.4 million, or 6.9 cents a share, from $33.4 million.
The board declared a fourth-quarter distribution of 1.5 cents, taking the annual payout to 6 cents per share.
Argosy forecast 2014 full-year dividends of 6 cents a share. It gave no other earnings guidance.
Net property income fell 1.9 percent to $69.9 million in the latest year, which it said reflected the sale of 15 properties a year earlier.
Argosy acquired the NZ Post Building in Wellington in March for $60 million, with upgrade spending estimated at $40 million. It also made the conditional acquisition of a Stout St property in Wellington for $33 million, with $47 million earmarked for upgrade work.
To help fund the investments, it raised $100 million via a placement and share purchase plan.
The company's property portfolio was revalued at $976.9 million from $905.2 million. Its debt to total assets ratio slipped to about 33 percent from 41 percent as the value of assets rose and bank debt, excluding capitalised borrowing costs, fell to $329 million from $385 million.
Net tangible assets per share rose to 88.3 cents from 87.5 cents. The weighted average lease term (WALT) rose to 5.24 years from 4.77 years and occupancy rose to 96.2 percent from 94.1 percent.
Argosy's shares last traded at $1.06 and have gained 16.5 percent this year.