Ann: FLLYR: GMT: GMT records 71.4% increase in pr

• Release Date: 15/05/13 12:06
• Summary: FLLYR: GMT: GMT records 71.4% increase in pre-tax profit
• Price Sensitive: No
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GMT
15/05/2013 10:06
FLLYR

REL: 1006 HRS Goodman Property Trust

FLLYR: GMT: GMT records 71.4% increase in pre-tax profit

Goodman (NZ) Limited, the manager of Goodman Property Trust ("GMT" or
"Trust") is pleased to announce the Trust's annual result for the year ended
31 March 2013.

Key highlights include:
+ A $38.2 million increase in profit before tax to $91.7 million, compared to
a profit of $53.5 million the previous year.
+ A corresponding $37.4 million or 92.4% increase in after tax profit, to
$77.9 million.
+ Distributable earnings  before tax of $87.7 million or 8.21 cents per unit
on a weighted average issued unit basis. This compares to $80.9 million or
8.41 cents last year.
+ Full year cash distributions of 6.25 cents per unit, representing 79.3% of
after tax distributable earnings on a weighted average issued unit basis.
+ 100% ownership of Highbrook Business Park following the acquisition of the
remaining joint venture interests in December 2012, for $186.6 million.
+ More than $235 million of new equity issued through the Highbrook
acquisitions, the associated equity initiatives and the ongoing operation of
the Distribution Reinvestment Plan.
+ An asset sales programme that has recycled $34.9 million of capital into
value adding development activity.
+ Debt restructuring and refinancing activity, amalgamating three previous
standalone facilities, into a single $600 million bank facility at
competitive new margins.
+ Continued development impetus with the commencement of nine new projects
providing over 48,000 sqm of net rentable area.
+ Strong leasing results across the investment portfolio with 144,000 sqm of
space secured on new or revised terms.
+ Achieving an average occupancy rate of 96% over the period with a weighted
average lease term of 5.3 years at 31 March 2013.

Keith Smith, Chairman of Goodman (NZ) Limited, said, "A strengthening
investment market and improved valuation outcome have contributed to this
year's strong profit result. It has been an active 12 months with new
investment and equity initiatives, refinancing activity and development
success enhancing the Trust while providing a solid platform for future
growth."

Result overview
With a strengthened balance sheet and an enhanced property portfolio the
Trust has achieved its operational objectives and recorded its highest after
tax profit in more than 5 years.

Profit before tax has increased 71.4% from the previous corresponding period
to $91.7 million, while after tax profit has increased by 92.4% to $77.9
million. The substantial lift reflects the impact of a strengthening
investment market, strategic acquisitions and ongoing development success.

John Dakin, Chief Executive Officer of Goodman (NZ) Limited, said, "The
strong result signals a new momentum in our business, total property assets
have increased 23.2% to $2.0 billion while net debt as a percentage of
property assets has reduced to just 34.8%."

A sound operating performance from the investment portfolio together with the
additional revenue generated from completed development projects and the
recent Highbrook acquisitions (partly offset by asset disposals) have
contributed to the 5.2% increase in net property income, to $117.1 million.

Finance costs of $23.0 million are materially consistent with the previous
period while other administrative expenses have increased $3.4 million to
$11.9 million. The higher charge this year incorporates the transaction costs
associated with the Highbrook acquisitions.

The movement in non-cash items includes an improved valuation result, with
the Trust's property portfolio recording a gain of $4.2 million compared to a
devaluation of $19.5 million in the prior year. The annual valuation uplift
is the first since 2008 and reflects a strengthening investment market with
increased demand from private and institutional investors in a continuing low
interest rate environment.

While the movements in non-cash items have no impact on distributable
earnings, they contribute to the increase in net tangible assets from 92.9
cents per unit last year to 95.0 cents per unit at 31 March 2013 on a fully
diluted basis.

The reconciliation between the pre-tax profit of $91.7 million and the
distributable earnings result of $87.7 million before tax includes
adjustments for both cash and non-cash items.  A full reconciliation is
provided as an appendix to this announcement.

On a weighted average issued unit basis, distributable earnings were 8.21
cents per unit before tax and 7.88 cents per unit after tax, consistent with
the guidance range.

Next distribution
The record date for the fourth quarter distribution of 1.5625 cents per unit
is 13 June 2013 with payment on 27 June 2013. There are no imputation credits
attached to the distribution.
This final quarterly payment will result in a full year cash distribution of
6.25 cents per unit, reflecting a payout ratio of 79.3%.

Eligible Unitholders are reminded that the Distribution Reinvestment Plan
continues to operate with a 2% discount and any amendment to their
participation is required by 5:00pm on the record date. Changes should be
advised directly to the registrar, Computershare Investor Services.

Investment initiatives
One of the major achievements of the year was the successful acquisition of
the remaining interests in Highbrook Business Park.

The $186.6 million transaction secured the joint venture interests owned by
investment partners Goodman Group and interests associated with the estate of
Sir Woolf Fisher.

John Dakin said, "This strategic acquisition gives the Trust 100% control of
one of New Zealand's premier real estate assets. It provides immediate and
longer term benefits to the Trust while also allowing greater operational
flexibility."

With a value in excess of $650 million Highbrook Business Park is already a
significant driver of GMT's operational and financial performance. With
additional development potential the estate provides the Trust with an
enhanced growth profile.

The strategic rationale, the quality of the estate and a beneficial
consideration structure (which included an element of deferral for a period
of 3 years) were endorsed by Unitholders who voted overwhelmingly in favour
of the initiative.

Capital management
On-going equity and debt initiatives during the year have enhanced the
Trust's strong balance sheet position and provided the funding capacity for
the Trust to pursue its investment and development strategies.

These initiatives included:
+ A $60.0 million private placement to institutional investors on 13 November
2012;
+ A Unit Purchase Plan in January 2013 to eligible Unitholders that raised a
further $30.0 million of equity;
+ The issue of $130.6 million of GMT stock ($37.3 million is deferred for 3
years) to Goodman Group and interests associated with the estate of Sir Woolf
Fisher as part consideration for the Highbrook acquisitions;
+ The restructuring and consolidation of the Trust's bank facilities into a
single $600.0 million facility and the refinancing of that facility on
competitive new terms;
+ Recycling of almost $35.0 million of capital into the value adding
development programme through the disposal of three assets; and
+ The operation of the Distribution Reinvestment Plan for two quarters
raising $20.5 million in total.

John Dakin said, "Support for the Highbrook acquisitions was demonstrated by
strong investor demand in the equity raising initiatives associated with the
transaction.  An additional benefit of the purchase is a simplified ownership
structure which has facilitated the restructuring and refinancing of the
Trust's bank facilities, providing considerable interest savings in FY14 and
beyond."

Asset sales and the operation of the Distribution Reinvestment Plan have
remained important sources of new equity funding, contributing over $55
million of additional capital during the year.

A strengthening investment market is expected to drive a more active sales
programme in FY14 with more than $50.0 million of property being targeted for
disposal. Additional assets will also be positioned for sale over the next
18-24 months.

It is expected that debt capacity together with the equity provided by the
asset sales programme and the ongoing operation of the Distribution
Reinvestment Plan will provide the funding capacity to finance an accelerated
development programme.

At 31 March 2013, the Trust had a weighted term to expiry across all its debt
facilities of 3.2 years, an interest cover ratio of 2.6 times and net
borrowings represented 34.8% of property assets.

Investment portfolio
Improving business confidence and a continuing focus on customer service has
supported strong leasing results with 144,000 sqm of space secured on new or
revised terms during the year.

The majority of space leased during the year was secured by existing
customers, many of whom were increasing their space requirements or renewing
their leases well ahead of expiry.

This leasing activity, which equates to around $19.5 million of annual rental
income, has helped maintain occupancy at 96%. It has also ensured that the
consistent rental streams generated by the portfolio are contracted well into
the future.

At 5.3 years, the Trust's weighted average lease term offers considerable
certainty around future revenue.

Resilient occupier demand is reflected in underlying property market
fundamentals with improving occupancy levels and modest rental growth being
reported in the key Auckland and Christchurch locations that GMT invests in.
An improved outlook, together with strong investment demand from local and
offshore investors, has also contributed to strengthening asset values.

The Trust's investment portfolio has recorded a corresponding uplift with the
weighted average market capitalisation rate firming from 8.5% to 8.1%. The
0.4% compression from the previous corresponding period also reflects the
changing composition of the portfolio following the Highbrook acquisitions in
December 2012.

Development progress
GMT's increased investment in Highbrook Business Park has enhanced an already
high quality property portfolio and provided further development potential at
a time when occupier demand and market activity are increasing.

John Dakin said, "Accelerating our development programme and realising the
value in the Trust's strategic land holdings is a key business focus."

The Trust has commenced 48,000 sqm of new projects across its development
estates over the last year, sustaining the momentum initiated with the
commencement of The Crossing development at Highbrook Business Park in 2011.

The largest of these projects include;

+ A high quality, low-rise office building at Central Park Corporate Centre
in Greenlane, The 5,340 sqm facility has been leased to existing customers
Genesis Energy and Restaurant Brands ahead of its completion in July 2013.

+ A 17,150  sqm distribution centre for Frucor at M20 Business Park in Wiri,
the recently completed facility has a current valuation of $25.8 million.

+ A new 10,620 sqm warehouse for logistics customer Mainstream at Savill Link
in Otahuhu.

Following the Trust's 31 March 2013 balance date, two further new industrial
developments have commenced for Trio Group at Highbrook Business Park and
Bridgestone at M20 Business Park.

The increase in development activity is expected to continue as forecast
economic growth converts into sustained occupier demand. While the majority
of this demand is likely to be design-build projects, the Trust will continue
to undertake a limited amount of partial or uncommitted development.

Outlook and guidance
The benefits of recent capital management initiatives together with rising
business confidence and a more positive economic outlook are expected to
support continued strong operating results from the Trust.

With around 12% of its $2.0 billion property portfolio invested in land, GMT
is also well positioned to take advantage of an improving occupier market and
the resulting uplift in demand for tailored property solutions.

These assumptions underpin the distributable earnings guidance for the 2014
financial year of 8.2-8.4 cents per unit before tax. Cash distributions are
expected to be no less than 6.25 cents per unit, representing around 80% of
after tax distributable earnings.

John Dakin said, "While the current operating environment remains highly
competitive, the quality of GMT's portfolio, recent capital management
initiatives and a growth orientated development strategy mean we are well
placed to achieve our investment objectives."

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

Attachments provided to NZX:
1. NZX Appendix 1
2. NZX Appendix 7
3. Independent Auditors' Report
4. Investor Presentation
5. Media Release

About Goodman Property Trust:
GMT is New Zealand's leading industrial and business space provider. It has a
substantial property portfolio that accommodates more than 250 customers.

It is a high quality business with an investment grade credit rating of BBB
from Standard & Poors.

GMT is an externally managed unit trust, listed on the NZX. It has a market
capitalisation in excess of $1.3 billion, ranking it in the top 15 of all
listed investment vehicles. The Manager of the Trust is a subsidiary of the
ASX listed Goodman Group, Goodman Group are also the Trust's largest investor
with a cornerstone unitholding of 17.6%.
End CA:00236242 For:GMT    Type:FLLYR      Time:2013-05-15 10:06:33