GMT
11/11/2015 09:08
HALFYR
PRICE SENSITIVE
REL: 0908 HRS Goodman Property Trust
HALFYR: GMT: GMT on track to deliver 3.1% increase in cash distributions
Goodman (NZ) Limited, the manager of Goodman Property Trust ("GMT" or
"Trust") is pleased to announce the Trust's interim result for the six months
ended 30 September 2015.
GMT has continued its focus on improving portfolio quality with asset
recycling funding the Trust's value adding development programme. Through
this disciplined approach GMT is building one of the best portfolios in New
Zealand, with high quality assets predominantly located in Auckland.
John Dakin, Chief Executive Officer of Goodman (NZ) Limited said, "GMT has
achieved another impressive interim result, generating pre-tax distributable
earnings of $57.1 million. The Trust is on target to deliver a strong full
year profit with asset management initiatives, development completions and
robust investment markets expected to contribute to a positive revaluation
gain."
Financial highlights for the first six months include:
- Distributable earnings of $57.1 million before tax or 4.64 cents per unit
on a weighted average issued unit basis, compared to 4.53 cents per unit in
the previous period.
- Profit before tax of $53.1 million, compared to $65.3 million previously.
The variance is largely attributable to the recognition of $13.7 million in
fair value gains on certain investment properties last year.
- Completion of new treasury initiatives significantly improving the
diversity and tenor of the Trust's debt facilities.
- Commencement of new development projects totalling $72.6 million.
- An active sales programme with $72.1 million of assets contracted for sale
following the Trust's interim balance date.
- Net tangible assets of 109.1 cents per unit compared to 108.4 cents per
unit at 31 March 2015.
Keith Smith, Chairman and Independent Director of Goodman (NZ) Limited said,
"The continuation of a development led growth strategy, active management and
stable operating conditions have all contributed to the Trust's strong
financial result."
Greater levels of development activity, together with lower financing and
corporate costs have underpinned the growth in distributable earnings, which
increased 2.4% to 4.64 cents per unit , before tax. The result is consistent
with the full year guidance, which was reaffirmed today, at around 9.4 cents
per unit.
John Dakin said, "We are executing a strategic plan that is focused on
building a high quality real estate business with a secure and diverse
capital structure. An accelerated development programme, funded through asset
recycling, is an important component of an overall strategy that is
positioning GMT for sustainable long-term growth."
Further information on the financial result, including the reconciliation
between profit and distributable earnings, is provided in the appendix of
this announcement and in the Trust's interim report.
The report was released today and is available on the Trust's website at:
www.goodman.com/nz.
Property Portfolio
John Dakin said, "Steady economic growth and historically low interest rates
are providing a stable operating environment for business. Customer demand
remains sound and over 50,000 sqm of leasing transactions were completed
during the period."
This leasing success has maintained occupancy at 96% and the weighted average
lease term, across the portfolio, at more than five years.
Robust property fundamentals, characterised by low vacancy rates and modest
rental growth, are also supporting the Trust's development programme.
Five new projects, totalling $72.6 million were announced in the first half
of the year.
Encompassing over 34,000 sqm of rentable area, these new developments are
expected to generate $5.7 million of annual rental income and deliver
valuation gains of between 10% and 15% once completed.
John Dakin said, "Progressing the development programme and realising the
value in GMT's strategic land holdings remains a key priority."
Capital Management
GMT's strong balance sheet position is being maintained through asset
recycling, with new development activity being funded directly through asset
sales.
At 30 September 2015, GMT's loan to value ratio was 36.1%, at the lower end
of the 35% to 40% target band that the Board believes is optimal for the
Trust and significantly below the 50% threshold permitted under its debt and
trust deed covenants.
Keith Smith said, "While a more active property strategy is refining and
improving the quality of the portfolio, new treasury initiatives have
significantly enhanced GMT's capital structure with improvements to the
diversity and tenor of the Trust's debt facilities."
These initiatives include:
? a private placement to US investors in April 2015 securing NZ$156 million
of debt funding on 10,12 and 15 year terms;
? an extension to the Goodman+Bond programme with the issue of a $100
million, seven year retail bond in June 2015;
? refinancing of the GMT main bank facility on competitive new terms; and
? renewing and extending the bank facilities of Wynyard Precinct Holdings
Limited, the Trust's Viaduct Joint Venture, following the interim balance
date.
With a combination of bank debt, wholesale bonds, retail bonds and USPP
issuance, GMT has a very diverse debt book with bank borrowings making up
less than 50% of drawn debt. It is also long dated with these facilities
having a weighted average term to expiry of 5.2 years, at 30 September 2015.
Outlook and Guidance
A more active operational strategy, implemented to take advantage of strong
customer demand and robust property fundamentals, is improving an already
high quality portfolio and delivering consistent financial results for GMT.
A stable economic environment will support a continuation of the current
development programme. With $72.6 million of projects already confirmed, more
than $100 million of new developments are expected to commence this financial
year.
Funded through asset sales it is a value adding activity that is enhancing
the portfolio, while improving the quality of GMT's cash earnings.
The Board and Management Team are encouraged by the business outlook and
believe the current strategy is the right approach for long term growth.
Distributable earnings guidance for the year has been reaffirmed at around
9.4 cents per unit, before tax. A corresponding increase in the level of cash
distributions paid to Unitholders is also forecast and these are expected to
total 6.65 cents per unit, 3.1% higher than the 6.45 cents per unit paid last
year.
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. GMT and GMT Bond Issuer Interim Report 2015
End CA:00273180 For:GMT Type:HALFYR Time:2015-11-11 09:08:09
