THE sharemarket-spurned Hedley Leisure and Gaming Property Trust has ended a turbulent first year as a public company with an after-tax operating profit of $10.1 million on a revenue of $77.3 million.
But it has written down the value of its 100 plus properties by almost $64 million to $1.09 billion. The writedowns, along with property acquisition costs, more than $3 million in terminated contract fees and more than $9 million lost on the sale of shares in ALE Property Group, resulted in an unaudited loss of $75.1 million.
Despite the paper loss, the result is seen as solid and in line with forecasts.
Greg Nucifora, of Bell Potter Securities, said despite the share market continuing to ignore the company's performance, the reported results painted a different picture.
"Revenues have held up, there have been no defaults in rents from pub tenants, the directors say shares have a net tangible asset value of $2.49 (compared with its share price close of 51c) and has good, free cash flows," Mr Nucifora said.
Another market analyst, Michael Ryan, from ABN Amro Morgans, described the report as "upbeat" but said there was obviously still a gap between what the company was saying and what the market was reading into the performance and structure.
The concern of the market, he believes, is related to HLG’s exposure to another troubled pub group, National Leisure and Gaming. While NLG, which leases more than a third of the HLG pubs, is paying its rent, its bankers have only guaranteed continued finance until the middle of next year.
HLG chief executive Tom Hedley said the reduction in the pub values reflected the broader property market.
NLG Price at posting:
1.2¢ Sentiment: None Disclosure: Held
