GMT
19/05/2016 08:39
FLLYR
PRICE SENSITIVE
REL: 0839 HRS Goodman Property Trust
FLLYR: GMT: GMT Delivers Record Annual Profit of $247.9 million
Goodman (NZ) Limited, the manager of Goodman Property Trust ("GMT" or
"Trust") is pleased to announce GMT's financial results for the year ended 31
March 2016.
Highlights include:
+ A 45.1% increase in profit before tax, from $170.9 million to $247.9
million.
+ Fair value gains of $145.8 million, as a result of the portfolio
revaluation.
+ An 11.1% increase in net tangible assets to 120.4 cents per unit.
+ Operating earnings before tax of $117.0 million or 9.41 cents per unit ,
a 2.7% increase on the 9.16 cents per unit achieved last year.
+ Tax-paid cash distributions of 6.65 cents per unit, 3.1% higher than the
6.45 cents per unit paid in the previous corresponding period.
+ Commencement of 12 new development projects totalling $148.7 million.
+ A successful sales programme with $124.2 million of asset disposals.
+ A strong balance sheet with a look through loan to value ratio of 33.9%
Keith Smith, Chairman and Independent Director said, "A more active
operational strategy has been pursued in recent years to take advantage of
the positive economic environment and strong property market conditions that
exist."
The focus has been on maximising the performance of the investment portfolio
and advancing the development programme.
Chief Executive Officer, John Dakin said, "With more than $350 million of new
development projects secured in the last three years, it's a strategy that is
transforming the Trust's land holdings into high quality, income producing
assets."
Funded through asset sales, it is a sustainable business activity that is
renewing and refining the wider portfolio.
It is also increasing the alignment between the cash earnings of the Trust
and the distributions that it pays.
A comprehensive summary of GMT's financial performance is contained within
the 2016 Annual Report. The report was released today and is available online
at www.goodmanreport.co.nz
Portfolio Performance
Over 159,000 sqm of leasing transactions were completed during the year,
maintaining portfolio occupancy at an average of 96% .
John Dakin said, "Customer demand has remained sound over the last 12 months,
with favourable economic conditions and a stable operating environment
facilitating GMT's business growth."
The demand that is supporting the strong leasing results in the investment
portfolio is also contributing to a record level of new development activity
being undertaken.
John Dakin said, "With $148.7 million of new projects announced last year,
we're making substantial progress in developing out GMT's strategic land
holdings. Following the completion of the current work book the Trust's land
weighting will reduce to just 8.3% of total property assets, while investment
in the favoured Auckland Industrial and Business Park sectors will increase
to 67.8%."
This is a deliberate reweighting that is consistent with a long-term
ownership strategy that the Board and Management Team are confident will
deliver the greatest returns to Unitholders.
Valuation Outcome
Recent development projects have also made a significant contribution to this
year's $145.8 million revaluation gain.
The 6.7% increase in the value of the overall portfolio reflects a rising
property market, characterised by greater levels of transactional activity
and record pricing.
The strength of this investor demand is demonstrated in the 55bps firming in
the capitalisation rate, from 7.50% to 6.95%. The shift also reflects a
change in the composition of the portfolio, with ongoing development and
sales activity improving the overall quality.
Capital Management
At 31 March 2016 GMT's look through loan to value ratio was 33.9%, a
reduction from the 34.2% reported last year and significantly below the 50%
threshold permitted under its debt and Trust Deed covenants.
Keith Smith said, "With an active sales programme funding new investment and
development opportunities, GMT's strong balance sheet position has been
maintained. New treasury initiatives have also enhanced GMT's capital
structure with improvements to the diversity and tenor of the Trust's debt
facilities."
With a combination of bank debt, wholesale bonds, retail bonds and US Private
Placement Notes, GMT has a very diverse debt book. It is also long dated,
with these facilities having a weighted average term to expiry of 5.4 years
at 29 April 2016, following the most recent bank refinancing.
Future focus
A more active operational approach is improving an already high quality
portfolio and delivering consistent financial results for GMT.
The strategy has five key objectives, including;
1. An accelerated development programme to utilise the Trust's lank bank
2. Sustainable growth with asset recycling funding new investments
3. Portfolio renewal and refinement
4. Greater alignment between cash earnings and distributions
5. Maintaining GMT's financial strength through prudent capital management
Keith Smith said, "A continued focus on these key areas will further improve
the quality of the business and reinforce GMT's position as one of New
Zealand's leading real estate providers."
With stable property market fundamentals and low interest rates stimulating
business growth, the immediate outlook for GMT remains sound.
The Board expects GMT's operating earnings before tax to increase to around
9.5 cents per unit in 2017. Cash distributions are forecast to be at least
6.65 cents per unit.
For further information please contact:
John Dakin
Chief Executive Officer
Goodman (NZ) Limited
(09) 375 6063
(021) 321 541
Andy Eakin
Chief Financial Officer
Goodman (NZ) Limited
(09) 375 6077
(021) 305 316
Keith Smith
Chairman and Independent Director
Goodman (NZ) Limited
(021) 920 659
End CA:00282613 For:GMT Type:FLLYR Time:2016-05-19 08:39:55
