GMT
20/05/2015 08:49
FLLYR
PRICE SENSITIVE
REL: 0849 HRS Goodman Property Trust
FLLYR: GMT: GMT Reports Annual Profit of $170.9 million
Goodman (NZ) Limited, the Manager of Goodman Property Trust ("GMT" or
"Trust") is pleased to announce GMT's financial result for the year ended 31
March 2015.
Continuing development progress and positive leasing outcomes, together with
sale profits and fair value gains across the investment portfolio have been
the main drivers of the Trust's record profit.
The year's financial and operational highlights include:
+ A 16.4% increase in profit before tax to $170.9 million, compared to a
profit of $146.8 million in the previous corresponding period.
+ Distributable earnings before tax of $112.3 million or 9.16 cents per unit
on a weighted average issued unit basis.
+ Tax-paid cash distributions of 6.45 cents per unit, representing 80.7% of
after tax distributable earnings.
+ New development projects totalling $112.1 million.
+ Introduction of GIC as a joint investment partner in Auckland's rapidly
developing Viaduct Quarter.
+ Fair value gains of $75.3 million as a result of the portfolio revaluation,
including $20.5 million attributable to GMT's development activity.
+ An active sales programme with disposals of $148.8 million generating
profits of $4.5 million.
+ An 8.0% increase in net tangible assets to 108.4 cents per unit at 31 March
2015.
A property strategy tailored to today's positive operating environment and
the implementation of new strategic initiatives have contributed to the
Trust's strong financial result while positioning the business for longer
term growth.
Keith Smith, Chairman and Independent Director of Goodman (NZ) Limited said,
"The last financial year was a defining 12 months for GMT and the Board is
extremely pleased with the advances that have been made and the impressive
results that have been achieved."
With active management maximising the performance of the investment
portfolio, a deliberate acceleration in GMT's development programme is
converting the Trust's strategic land holdings into high quality income
producing assets.
John Dakin, Chief Executive Officer of Goodman (NZ) Limited said, "Recycling
capital into our development projects is a key component of an organic growth
strategy that is enhancing the portfolio and growing GMT's underlying cash
earnings."
Distributable earnings before tax have increased to $112.3 million. On a
weighted average issued unit basis, this equates to 9.16 cents per unit,
ahead of earlier guidance of around 9.1 cents per unit.
The increase reflects greater revenue but also lower cash expenses following
changes to the Trust's fee structure including the requirement for the
Manager to use its base fee to subscribe for new Units in GMT. Adjusting for
this change GMT's distributable earnings were 8.65 cents per unit, a 3.5%
increase on the 8.36 cents per unit achieved last year.
The fee changes enhance an already competitive structure, with the Trust
maintaining one of the lowest management expense ratios in the listed
property sector at 0.52%.
The reconciliation between profit and distributable earnings is provided in
the appendix of this announcement. Further information is contained in the
financial statements presented within the 2015 Annual Report.
Property Portfolio
Sustained economic growth and strong property fundamentals are supporting
greater levels of customer demand. It's a market dynamic that is being
reflected in the performance of the Trust's property portfolio.
Highlights include:
+ New development projects adding 50,000 sqm of rentable area and 600 covered
car parks to the portfolio. These projects are expected to generate $8.7
million of annual rental income once completed.
+ Leasing transactions securing 100,000 sqm of office and industrial space on
new or revised terms.
+ Average portfolio occupancy of 97% during the year and a weighted average
lease term of 5.1 years at 31 March 2015.
+ A 0.4% firming in the portfolio capitalisation rate to 7.5% following the
annual revaluation.
Robust property fundamentals and continuing low interest rates are also
contributing to a buoyant investment market. With a fair value gain of $75.3
million, GMT's property portfolio has recorded its strongest ever valuation
uplift.
The positive result is largely attributable to the firming in the
capitalisation rate across the investment portfolio and the contribution from
recently completed development projects.
These new facilities have recorded fair value gains of 12.6%, contributing
$20.5 million to GMT's annual profit.
Capital Management
John Dakin, said "Financing new development and investment activity through
asset disposals is facilitating the Trust's growth and we've taken advantage
of the buoyant investment market to sell eight assets during the period for
$148.8 million."
The focus on organic growth has removed the requirement for the additional
equity provided through the distribution reinvestment plan which remains
suspended. It has also been the catalyst for a more expansive strategy in the
Viaduct.
Keith Smith, said "Securing GIC as a joint investment partner has enabled GMT
to extend its Viaduct portfolio without committing additional capital,
preserving balance sheet capacity for its value adding development
programme."
GMT's strong balance sheet position is reflected in its conservative level of
debt with a look through loan to value ratio of 34.2% at 31 March 2015.
Following the Trust's year end, further capital management initiatives have
been announced. These include:
+ a USPP offer in April 2015 securing US$120 million of debt funding on 10,
12, and 15 year terms; and
+ an extension to the Goodman+Bond programme with the announcement of an
intention to issue a new seven year retail bond in June 2015, targeting $75
million of new debt funding with up to $25 million of over subscriptions.
Outlook and guidance
A growing economy is continuing to generate strong customer demand for high
quality, well located business space.
Keith Smith said, "We have refined our business strategy, adopting a more
active operational approach that is focused on delivering strong profits and
sustainable long-term earnings growth."
Advancing GMT's development programme and realising the value in the Trust's
strategic land holdings is a key component of this strategy. It reflects a
wider philosophy that is focused on building excellence across all GMT's
business activities.
With a stable economic outlook and a property strategy tailored to today's
positive operating environment the Board expects distributable earnings for
the 2016 financial year to be around 9.4 cents per unit before tax. A
corresponding increase in tax paid cash distributions to around 6.65 cents
per unit is also expected.
Both measures reflect an increase of around 3% from the 2015 financial year
result.
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
Goodman (NZ) Limited
(021) 920 659
Attachments provided to NZX:
1. NZX Appendix 1
2. Investor Presentation
3. Goodman Property Trust and GMT Bond Issuer Limited Annual Report 2015
End CA:00264522 For:GMT Type:FLLYR Time:2015-05-20 08:49:45
