Property for Industry profit down 13%

Property for Industry’s net operating profit after tax for distribution was $8.033 million in the six months to June 30, down 13.1% on the same period last year.

On a normalised basis PFI (NZX:PFI) recorded a net profit after tax and unrealised losses of $6.649 million, down about 7% compared to the corresponding period in 2010.

Rentals for the six months were 4.7% lower than the previous interim period, at $15.621 million, mainly due to previous property sales totalling $21.45 million, partly offset by new revenue from completed developments and recent rent reviews.

PFI’s gearing following the property sales was down to 30.4% as at 30 June and the company’s average debt level through the period was $108 million (2010: $122 million).

However, despite lower debt levels, the higher costs associated with the new five-year bank debt facility entered into late last year meant the company’s interest costs were broadly in line with the previous interim period, at $4.122 million.

Taxation costs were also higher as a result of changes to depreciation rules and prior-year tax adjustments received by PFI during the previous interim period.

PFI’s net earnings per share for the interim period, based on distributable profit, were 3.69c/share (2010: 4.29c/share) and PFI shareholders will receive a second-quarter dividend of 1.55c per share plus imputation credits of 0.4366c.

General manager Ross Blackmore says key industrial property market indicators are improving, with CB Richard Ellis showing industrial vacancy rates at 4.4% and prime industrial vacancy as low as 2.9%.


PFI’s occupancy as at 30 June 2011 was 97.4% following the lease expiry over a 7,000 sq m warehouse in Mt Wellington.

The company has sold its property at 11 Barnes St, Wellington, along with 6,751 sq m of non-income producing land on an adjoining property, to an owner-occupier for $7.35 million, subject to subdivision consent, with settlement scheduled for November.

With continued high portfolio occupancy, Mr Blackmore says the company’s focus has been on lease restructuring activity and work with existing customers.

“It is pleasing that customers such as Bidvest, ASB Bank, Wickliffe NZ and Gough Gough & Hamer have all recently entered into new agreements with PFI, for various combinations of additional premises, refurbished premises or extended leases on existing premises,” he says.

PFI, which is managed by AMP Capital Investors, has a portfolio of 50 properties with a total value of $350.8 million.