Portfolio changes fuel Goodman Trust’s annual net profit fall

Goodman Property Trust chairman Keith Smith says it's pursuing a disciplined growth strategy.

Goodman Property Trust’s annual net profit fell 9.3% as its manager continues to sell assets to fund new development.

The trust posted a net profit of $194 million for the year ended March compared with $213.8m the previous year.

The latest result included $106.3m in property valuation gains, down from $114.7m the previous year.

The trust sold $243.9m worth of assets during the year and a further $323.9m after balance date from selling its share of the Wynyard precinct joint venture.

“We have pursued a disciplined growth strategy over the past five years, selling assets to fund the trust’s development projects,” chairman Keith Smith says in a statement.

“It has rebalanced the portfolio and deleveraged the balance sheet, transforming GMT and positioning it for sustainable long-term growth.”

When all announced sales have settled, gearing will fall to less than 20% and the $2.2 billion portfolio will be 99% in industrial property in Auckland – the trust is in the process of exiting some small holdings in Christchurch.

Mr Smith says the development programme is well advanced and asset sales largely complete – the trust has sold nearly $1.2b worth of assets since 2013.

The trust started seven new development projects during the year costing $164.8m and has announced two more costing $54.1m since balance date.

It will pay a fourth quarter distribution of 1.6625c a unit, taking the year’s total payout to 6.65c a unit, which is 95% of the trust’s cash earnings.

Chief executive John Dakin says the manager is following a deliberate strategy in divesting the remaining office assets to fund “high-quality estates such as Highbrook Business Park” in East Tamaki.

Investing in industrial property in Auckland is “the sector and market that we believe will deliver the best long-term risk-adjusted returns,” Mr Dakin says.

The board is forecasting cash earnings of about 7c a unit for the current year and that the trust will make a steady payout of 6.65c per unit.

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2 Comments & Questions

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Unfortunately the "disciplined growth strategy " isn't impacting the most important metric ...dividend per share. dps growth from gmt has been very disappointing...be great if the company could calculate the growth per year over 5 years ,compare it to inflation and comment.

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It's share price is a bit expensive compared to it's dividend payout. Still more than you would get from a bank T/D though.

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