Property for Industry rental income up 8.8%, profit lifted by non-cash items

Profit rose to $11.87m in the six months ended June 30, from $7m a year earlier.

Property for Industry, which doubled in size after a merger, posted an 8.8 percent increase in first-half rental income and said profit was lifted by non-cash valuation changes and a smaller tax bill.

Profit rose to $11.87 million in the six months ended June 30, from $7 million a year earlier, the Auckland-based company says in a statement. Sales rose to about $16 million from $14.7 million helped by rental income from properties acquired in the last quarter of 2012 and first quarter of 2013.

The results are the last before the specialist industrial property company's elevation in the NZX 50 Index after its merger with Direct Property Fund, which was completed on July 1, almost doubling the enlarged group's shares on issue to 412 million and increased properties in its portfolio to 83 from PFI's existing 50.

The merger elevated PFI to 28th rank on the NZX 50 Index and made it the fifth-largest listed property company.

Distributable profit, a measure the company uses to determine dividend payments, was $7.59 million, or 3.44 cents a share, little changed from $7.64 million, or 3.48 cents, a year earlier. That profit measure strips out a $3 million gain for the fair value change in derivative financial instruments.

It paid 3.4 cents a share in dividends, amounting to a payout ratio of 99 percent, from 3.1 cents, or 89 percent, a year earlier.

PFI shares last traded at $1.39 and have gained 14 percent this year. Shareholders of the unlisted Direct Property ended up holding 46 percent of the enlarged group and PFI holders owned about 54 percent.

PFI is managed by PFIM, a subsidiary of DPF Management, which was also the manager of Direct Property. DPF Management is associated with McDougall Reidy & Co, whose managing director is Greg Reidy. PFIM took over the management contract of PFI from AMP Capital Investors in January last year.

(BusinessDesk)