Investore beats prospectus forecast with debut annual profit of $28.5 million

Net profit was $28.5 million in the 12 months ended March 31, from $11.5m forecast in its prospectus, the Auckland-based property investor said in a statement.

Investore Property, the property investor spun out of Stride Property last year, posted an inaugural full-year profit as a listed company that beat its prospectus forecast after recording a stronger-than-expected increase in the value of its property portfolio.

Net profit was $28.5 million in the 12 months ended March 31, from $11.5m forecast in its prospectus, the Auckland-based property investor said in a statement. It provided six-month figures for the year-earlier period which weren't easily comparable.

Other key measures of financial performance were broadly in line with the company's forecasts. Net rental income was $35m in the year, versus the $34.9m base case estimate in its prospective financial information. Corporate expenses were $4.7m versus $4.8m forecast and net finance expenses were $13.3m versus $12.9m.

Distributable profit before tax was $21.2m compared with a forecast of $20.7m, allowing the company to declare annual cash dividends of 5.34 cents a share, including 2.06 cents for the quarter ended March 31. It is targeting payments for 2018 of 7.46 cents. Its property portfolio was valued at $660.4m and net drawn debt was $261m, for a bank loan to value ratio of 39.5 per cent.

Other income was $13.7m versus a forecast expense of $1.2m, which Investore said included the net change in fair value of investment properties. It paid tax of $2.3m compared with $4.5m forecast.

The occupancy rate across its properties was 99.8 per cent at year end while its weighted average lease term (WALT) was 14.3 years.

Investore raised about $189m in its initial public offering last year, allowing the company to buy 14 Countdown supermarkets as part of its 39 building portfolio, which was valued at $642.8m as at September 30. The company also refinanced its bank facility of $370m, of which 84 per cent was drawn as at March 31.

The property investor was separated from Stride and listed on the NZX in July, with Stride retaining a 19.9 per cent shareholding and the management contract to run the portfolio. Investore paid Stride $2.7m in management fees in the full year.

The shares last traded at $1.35 and have fallen 9.4 per cent from last year's $1.49 offer price.