Stride Property beats forecast with annual profit on valuation gains
Stride Property Group, which spun out its retail portfolio into a separately listed vehicle last July, reported annual profit ahead of its forecasts with a huge increase in property valuations.
The company's net profit was $56.9 million in the year to March 31, compared to its $31 million forecast, though that includes a $22.5 million increase in fair value of investment properties, compared to a predicted $1.7 million in the prospective financial statements. Net rental income was slightly ahead of forecasts at $63.6 million compared to $63.3 million, with profit before tax and other income at $37.5 million, from a projected $37.4 million.
Earlier this week, Investore Property, the separately-listed retail property investor, posted an inaugural full-year profit as a listed company of $22.9 million, beating its prospectus forecast of $11.5 million after recording a stronger-than-expected $13.7 million increase in the value of its property portfolio.
Investore separated from Stride and listed on the NZX in July, with Stride retaining a 19.9 percent shareholding and the management contract to run the portfolio. Investore paid Stride $2.7 million in management fees in the full year.
Stride said it has a very positive outlook with "opportunities for expansion across its real estate investment management, property development and property investment activities", and the 2018 financial year "is expected to be one of managed growth in line with forecasts set out at the time of the listing."
In a memorandum issued before the demerger, the company estimated management fee income would grow to $9.2 million in 2017 and $12.9 million in 2018. Today's results showed Stride made $8.5 million from management fees in 2017.
The memorandum also included projections of 11.25 cents per share in 2017 dividends, a 9.5 percent lift from those paid in 2016, and 11.77 cents per share in 2018 dividends. The board today declared a 9.96 cents per share final dividend for 2017, consistent with guidance given during the year, but lower than the 10.75 cents per share dividend from 2016.
The shares dipped 0.6 percent to $1.73, and have dropped 1.7 percent this year.