Investore Property in the red after revaluation, looks to sell some assets

A hefty revaluation has pushed Investore into the red. Photo / NZME

Investore Property has lifted its net rental income in the past 12 months but, like other property companies, a hefty revaluation has pushed it into the red.

And its announced a it will look to sell some assets and introduce a dividend reinvestment plan to “prudently position” its balance sheet, given the interest rate environment.

The New Zealand stock exchange-listed property company saw its portfolio valuation decline by 14.9% or $185.2m in the 12 months to March to $1.1 billion.

The movement saw it produce a loss after tax of $150 million, compared to last year’s profit of $118.2m.

Both Argosy Property and Goodman Property Trust, which both reported this week, have also seen similar results.

Investore’s loan to value ratio was 36.5%, up from 29.5%. Its LVR increased to 38.1% on a committed basis.

It said, while the committed LVR was near the upper end of the board’s target range of 30% to 40% on a long-term basis, there remained “significant headroom” to the debt covenant of 52.5%.

Meanwhile, its rental income increased by $2m to $60.3m in the 12 months, producing a distributable profit of $31m, up $1.2m.

Capital management

To “prudently position” its balance sheet given the high interest rate environment, Investore signalled its intention to sell “select, non-core” assets of between $25m and $50m. Any such sales would be used to repay bank debt.

However, those sales were provided the appropriate value could be realised.

As well as that, it was also introducing a dividend reinvestment plan.

The company said it benefitted from a strong hedging position, with 92% of drawn debt hedged or subject to a fixed rate of interest.

As a result, it said, its weighted average cost of debt increased by only 24 basis points in the past 12 months, to 4%.

Investore also confirmed its share buyback programme, previously paused in September, had been cancelled.

Investor’s shares closed at $1.45 per share yesterday, down 2.6% year-to-date.

That compared to net tangible assets per share of $1.84 as at the end of March, down from $2.32 last year.

Its board confirmed it intended to pay a cash dividend of 7.9c per share for the new financial year.

But, it said, the board was continuing to monitor progress on assets sales and market conditions throughout the year.