Property For Industry profit, earnings increase

Listed property trust Property for Industry has announced a net operating profit after tax for distribution (distributable profit) of $18.2 million for the year to December 31.

This is a 14.3% increase on the previous year; on a normalised basis (excluding tax adjustments and other non-recurring items), the increase was 4.9%.

The company’s rentals were up 3.5% to $32.5 million due to new developments, rent reviews and an acquisition late in the previous year.

Its year-end occupancy rate was 99.5%.

PFI recorded a full-year profit after tax of $10.0 million, compared with a loss of $12.5 million the previous year.

This includes an unrealised net reduction in portfolio value of $2.6 million (0.74%) and other NZ IFRS non-cash adjustments such as unrealised changes in the fair value of interest rate swaps.

Net tangible assets per share (NTA) reduced to $1.08 from $1.10 a year earlier while net earnings per share, based on distributable profit, were up 13% to 8.4c per share.

Interest costs for the year – the company’s largest single expense item – rose 2.6% to $8.1 million, with higher debt levels offset by lower interest rates.



Tax was down $1.4 million or 39.1% to $2.245 million as a result of prior-year tax adjustments.

The company’s gearing (total debt to total assets) at 31 December 2010 was 31.0 percent and will reduce to 29.9 percent on settlement of a recent unconditional property sale.

The company expects its 2011 distributable profit to be reduced by 4-5% as a result of a higher effective tax rate due to changes around depreciation that kicked in on January 1.

PFI general manager Ross Blackmore said the highlights of 2010 had included:



• The sales of four properties for a total of almost $16 million during 2010, with an unconditional contract for the sale of a further property secured since balance date


• A new five-year bank debt facility of $150 million, secured with a syndicate of two banks, with notable features of the new arrangement being both the tenor and the diversity provided by having two major trading banks as banking partners


• Completed or committed development projects with a total value of $10.2 million


• Stabilisation of industrial property values, yields and rents. 

PFI is New Zealand’s only listed company specialising in industrial property investment, and is managed by AMP Capital Investors.

Following the revaluation and sales, its portfolio of 52 properties now has a total gross value of about $348.7 million.