Property For Industry boosts full-year profit 21% on property value uplift

Property For Industry [NZX: PFI], the listed industrial property investor, increased annual profit 21 percent with an uplift in the value of investment properties strengthening the balance sheet.

Net profit rose to $72.8 million, or 17.25c  per share, in the 12 months ended December 31, from $59.9 million, or 14.55c, a year earlier, the Auckland-based company said in a statement. Operating revenue rose 4.9% to $66.9 million.

Non-operating earnings jumped 48% to $43 million, reflecting a $10.2 million gain on the value of investment properties to $987 million.

Property For Industry merged with Direct Property Fund to create an $800 million industrial property empire in 2013. The company invested $48.2 million in acquiring five properties across Penrose, Auckland, and one in Manukau, during the latest year. At balance date, it had 84 properties, from 79 in December 2014, with rent increasing 9.9% to $72.3 million.

"PFI has produced a robust 2015 result and is in excellent shape to capitalise on any continuation of favourable market conditions," general manager Simon Woodhams said.

Property For Industry raised $47.9 million in September, through a one-for-12 rights offer, at $1.44 per share. The cash raised was used to pay down bank debt related to recent acquisitions. The company has a bank loan facility of $375 million, with $330.9 million drawn down, from $312.8 million a year earlier.

It will pay a 2c per share dividend on March 9, with a February 29 record date. That takes the annual payout to 7.3c per share, up from 7.25c  per share in 2014. The company will also operate its dividend reinvestment scheme, with a discount of 2%  applied to the volume weighted annual sales price for the five trading days through March 3 this year.

Chairman Peter Masfen said the board expects distributable profit before management performance fees to be largely unchanged from 2015 and cash dividends to be approximately 7.3c  per share, subject to economic conditions.

The shares last traded at $1.62 and have gained 0.9%  this year. The stock is rated an average of 'sell' according to five analyst recommendations compiled by Reuters, with a mean target price of $1.51, a 6.8%  discount on the current stock price.

(BusinessDesk)