KEY POINTS:
Listed industrial property investor Property For Industry (PFI) achieved a record net profit and gross dividend for the 2006 year, reporting a 4.0 per cent increase in net profit and a 4.8 per cent increase in gross dividend.
The company's rentals for the year for the year to December 31, 2006 were 10.6 per cent higher at $29.142 million, showing the benefit of new acquisitions, design-build projects and higher rents following rent reviews.
PFI's net profit after tax and before revaluations (excluding the gain on the sale of one of the company's investment properties) was $14.063 million (2005: $13.516 million).
PFI's annual portfolio revaluation resulted in a gain of $33.448 million or 9.49 per cent, lifting net profit after tax, unrealised revaluation gains and the gain on sale to $47.893 million.
For the third year in a row, PFI's total return to shareholders (income yield plus share price appreciation) has exceeded industry benchmarks such as the NZX50 Index and the NZX Listed Property Index. In 2006, PFI delivered a total return to shareholders of 30.3 per cent .
Earnings per share before revaluations were 6.77 cents (2005: 6.59 cents); and after revaluations, 22.89 cents (2005: 26.05 cents).
Net tangible assets per share rose 13.8 per cent or $0.16 to $1.32 per share.
PFI shareholders will receive a final dividend of 2.163 cents per share plus imputation credits of 0.787 cents per share, bringing the total gross dividend for the year to 8.77 cents per share, a 4.8 per cent increase on the previous year. The net dividend for the year is 6.76 cents per share.
The record date for the fourth-quarter dividend is March 2, 2007 and payment will be made on March 9. The company's dividend reinvestment scheme is in place for the distribution and the discount rate for shares issued under the scheme remains at 2.5 per cent.
Following the revaluation, PFI's debt as a percentage of total assets is 28.3 per cent, below its self-imposed maximum of 35 per cent.
PFI adopted the new NZ IFRS accounting standards on 1 January 2007, meaning that this is the company's last set of financial statements to be prepared in accordance with previous NZ GAAP reporting standards.
PFI general manager Ross Blackmore said the company had acquired three properties during the 2006 year, and completed four development projects and 25 rent reviews. A strong leasing market had seen the company secure nine leases, covering a total area of 12,750 sqm and a total rent roll of more than $1.5 million.
The only significant vacancy in the company's portfolio, at 322 Rosedale Rd, Albany, had now been resolved, taking PFI's portfolio occupancy to 99.7 per cent.
"PFI's performance in 2006 was the result of success in all aspects of our business," commented Mr Blackmore. "It's pleasing to note that, already in the 2007 year, PFI has now committed to a $3.85 million development project at 956 Great South Rd, Penrose, for a building supplies showroom/warehousing operation."
Mr Blackmore added that last year's change in the investment taxation regime is expected to benefit many PFI shareholders. "Our understanding is that PFI will qualify as a portfolio investment entity (PIE) and our current intention is to participate when the new regime takes effect on October 1, 2007."
PFI is New Zealand's only listed company specialising in industrial property, and is managed by AMP Capital Investors.
- NZ HERALD STAFF
