Archive | Capital Properties

AMP to redeem Capital Properties notes, Beverley gives view on outlook

Published 23 December 2009

AMP Capital Property Portfolio has resolved to redeem the $34.2 million of Capital Properties NZ Ltd 8% capital notes with an election date of 15 April 2010.

 

The company’s 2010 notes remain listed on the NZDX after its equity listing ended in the 2006 takeover by AMP Property Portfolio, which still owns the company. Capital Properties had $9.7 million of capital notes with an election date in April 2009. Those notes were redeemed and replaced by borrowings from an Australian AMP company at a rate of 5.17%.

 

The 2009 notes will be redeemed for cash, plus any interest due.

 

Capital Properties’ interim report discloses a 12.5% fall in fall of its property assets in the past year – down $84.8 million to a portfolio of $560 million, also after sales and an $8.1 million increase in liability for interest rate swaps.

 

Chairman Anthony Beverley said management had focused on maintaining occupancy & cashflow, conserving capital & reducing bank borrowing through the sale of property.

 

He said in the interim report: “An increase in capitalisation rates is the key driver of the change in value of the company’s property assets, and continued volatility in interest rate markets is the key contributor to the unrealised loss in value of the interest rate swaps. The aggregate effect of these events has resulted in a net loss before tax of $4.3 million ($24.4 million net loss a year earlier).

 

Mr Beverley said Capital Properties’ total leverage fell from 23.6% to 21.8% in 6 months, primarily due to the reduction in the borrowing from the company’s parent following the sale of property.

 

NTA/share fell from $1.82 a year ago to $1.63.

 

Outlook

 

Mr Beverley said the outlook for the New Zealand property market “is one of caution & consolidation. As the recession has led investors to reprice risk, capitalisation rates have been the first to move. Rental rates usually follow, and this has been observed in the Auckland office market.

 

“As economic growth emerges both domestically & globally, a return of confidence should see valuations stabilise and the demand for office & industrial space improve. Over the next 6 months, management will attempt to further reduce balance-sheet leverage through the sale of some of the company’s smaller properties. This is part of a strategy being implemented by the company’s parent, AMP Capital Property Portfolio, to strengthen its balance sheet by reducing leverage to a target 35% in the next 6-month period.”

 

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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AMP-run Capital Properties securities face suspension for late report

Published 5 July 2009

Capital Properties NZ Ltd issued a 15-month result at the end of May, but has been told by NZX Regulation its securities will be suspended from trading unless it files an annual report by Tuesday 7 July.

 

The annual report was due to be filed by 30 June.

 

Capital Properties issued a consolidated statement of financial performance on 29 May, for the 15 months to 31 March. The company’s debt securities remain listed on the NZDX after its equity listing ended in the 2006 takeover by AMP Property Portfolio Investments Ltd, which still owns the company.

 

That May announcement showed a sharp slump in performance (15 months against 12, but with annualised percentage comparisons, and in any case the significance is in the size of the losses).

 

Trading revenue, at $75.8 million, was down 5.4% on an annualised basis and other revenue fell from $113.6 million to $2.6 million, reducing total operating revenue by 65% to $78.4 million.

 

From a $132.3 million pretax operating surplus, Capital Properties dropped to a $69.5 million loss. After a tax gain of $25.1 million, the company had an after-tax operating deficit of $44.4 million. A $4 million unrealised net fall in value of a joint venture cut the bottom line to a $48.4 million loss.

 

The story below refers to Capital as an entity with listed shares.

Earlier story:

31 May 2006: Capital Properties raised operating profit 15.5% in last year as listed entity

 

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Attribution: NZX statement, May company release, story written by Bob Dey for the Bob Dey Property Report.

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Capital Properties raised operating profit 15.5% in last year as listed entity

Published 30 May 2006


Capital Properties NZ Ltd, now owned by AMP Property Portfolio Investments Ltd, increased its after-tax operating profit (before property revaluations & recognition of deferred tax on property held for sale) by 15.5% to $20.9 million for the March year.Including the $84.7 million unrealised increase in investment property values, the net surplus rose 4.9% to $101.9 million ($97.1 million last year). Net property income was up 12.8% at $47.7 million ($42.3 million).Capital Properties chairman Murray Gribben said the increase in unrealised property values represented a 13.6% increase on the portfolio value a year earlier, which resulted from an increase in market rents, a reduction in market capitalisation rates, improved rental performance and a fuller recognition of the value of the company’s development sites.Pretax net profit rose 17.6% to $25.4 million ($21.6 million) after allowing for total interest costs of $17.1 million ($16.8 million) & administration expenses of $5.2 million ($4.6 million).


Mr Gribben said administration expenses were affected by the inclusion of $1.1 million of design & consultancy costs associated with potential development opportunities, which hadn’t reached the stage of board & tenant commitment by balance date to allow their capitalisation.The property portfolio was worth $615.3 million at balance date, up $78.7 million, essentially comprising a $73.1 million revaluation gain & $5.6 million capex.On this basis, net tangible assets/share rose from $1.29 to $1.66.


The portfolio net income yield was 8.1%, occupancy levels were 99.1% and the weighted average lease term was 3.9 years.Over the course of the year, shareholders’ funds increased by $96.1 million to $401.9 million, representing 59.1% of total assets. At 31 March, capital notes financed 11.3% of total assets and bank debt stood at $185.6 million, financing 27.3% of total assets.Mr Gribben said the New Defence building in Thorndon, Wellington, was forecast to add $78.5 million to the value of the company’s portfolio when the 18-year lease began in early 2007. This development has a reported value of $57.8 million at March 2006, comprising expenditure of $43.7 million and a development margin of $14.1 million recognised to date, which has been included in the reported total unrealised revaluation gain. It’s due for completion in September and the Ministry of Defence is expected to take occupation in February 2007.Pretax earnings/share (excluding revaluations) increased by 16.5%, from 9.1c to 10.6c.As the AMP unit progressed its takeover, Capital Properties suspended the payment of dividends after the September 2005 payment of the dividend for the first quarter of this financial year.Capital Properties continues to focus on the Wellington government office sector as its main area of investment, development & leasing activity.AMP Property Portfolio general manager Stephen Costley said market conditions over the past year had led to an increase in the value of Capital’s property assets. Office rents continued to rise and the demand for property assets remained strong. “The company will continue to focus on the Wellington government sector, where we anticipate low-risk rental growth and further development & refurbishment opportunities,” Mr Costley said.


Earlier stories:


12 May 2006: AMP sweeps remaining independents out Capital door


5 January 2006: AMP cuts Capital dividend ratio


11 May 2005: Capital Properties lifts operating profit 15%, gets $79 million revaluation lift


 


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Attribution: Company statement, story written by Bob Dey for this website.

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AMP sweeps remaining independents out Capital door

Published 11 May 2006


Capital Properties NZ Ltd’s 2 independent directors have resigned after the company adopted a new constitution on 1 May which removed the requirement for independents. It also made some other board changes.



AMP Property Portfolio Investments Ltd announced on 30 March it had achieved 100% control after a takeover offer & compulsory acquisition of remaining minorities. Capital was delisted on 12 April. Only its 3 debt securities remain quoted on the NZDX.


The last independent directors to go were James Ogden & Mike Cashin on 2 May, following chief executive Chris Gudgeon’s departure on 27 April. Mr Gudgeon has moved to the job of property general manager at Auckland International Airport Ltd.


Stewart McRobie & Rob Morrison, appointed by AMP Property Portfolio Investments, have also resigned and have been replaced by Simon Urquhart-Hay of AMP Capital Investors (NZ) Ltd & Stephen Costley, of AMP Property Portfolio, who headed the takeover campaign.


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Attribution: Company release, story written by Bob Dey for this website.

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AMP nudges past 90% of Capital Properties

Published 27 February 2006


AMP Property Portfolio Investments Ltd scraped past the 90% threshold for compulsory acquisition of remaining shares in Capital Properties (NZ) Ltd on Sunday, the last day of its 6-month bid to take over the Government tenancy specialist.



“We’re very pleased with the outcome. We have had positive momentum of acceptances throughout the course of the offer, which gave us confidence that we would reach the 90% threshold required for compulsory acquisition,” AMP Property Portfolio general manager Stephen Costley said today.


“The result shows that most of the shareholders found the offer of $1.48 cash/share full & fair. We were also very clear that this was the last opportunity to accept and that we wouldn’t be making another offer within the next 12 months, which may have factored into the decision-making of some shareholders.”


The final number of acceptances will be known later this week, when all acceptances postmarked up to Sunday 26 February have been received.


AMP went from 89.43% on Friday to 90.63% in the last of 3 updates on Monday.


Earlier stories:


25 February 2006: AMP bid for full Capital Properties stake goes down to wire


19 February 2006: AMP fuels Capital speculation by announcing end to speculation


12 February 2006: AMP within 1.2% of Capital Properties compulsory acquisition


1 February 2006: AMP just short of 90% of Capital Properties


14 January 2006: AMP extends Capital bid to 31 January


11 January 2006: ING holds trump at Capital Properties


 5 January 2006: AMP cuts Capital dividend ratio


24 December 2005: AMP extends Capital bid to 13 January


26 November 2005: Outcome of Capital Properties review out in January


4 November 2005: Capital directors suggest $1.55 OK as takeover price, and AMP works at belittling them


28 October 2005: AMP has 36% of Capital as Kiwi accepts 6c higher offer


23 October 2005: AMP tells Capital what should have been in Deloitte report, extends offer another week


 


If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].


 


Attribution: Company statement, story written by Bob Dey for this website.

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AMP bid for full Capital Properties stake goes down to wire

Published 25 February 2006


AMP Property Portfolio Investments Ltd had just over half a percent to go to reach the compulsory acquisition level at lunchtime on Friday in its $1.48/share takeover bid for Capital Properties (NZ) Ltd.



The bid closes at midnight on Sunday 26 February, with no further extension allowed, so AMP could still collect acceptances out of Saturday’s post.


AMP said its stake increased from 88.84% at 11 February to 89.43%.


Earlier stories:


19 February 2006: AMP fuels Capital speculation by announcing end to speculation


12 February 2006: AMP within 1.2% of Capital Properties compulsory acquisition


1 February 2006: AMP just short of 90% of Capital Properties


14 January 2006: AMP extends Capital bid to 31 January


11 January 2006: ING holds trump at Capital Properties


 5 January 2006: AMP cuts Capital dividend ratio


24 December 2005: AMP extends Capital bid to 13 January


26 November 2005: Outcome of Capital Properties review out in January


4 November 2005: Capital directors suggest $1.55 OK as takeover price, and AMP works at belittling them


28 October 2005: AMP has 36% of Capital as Kiwi accepts 6c higher offer


23 October 2005: AMP tells Capital what should have been in Deloitte report, extends offer another week


 


If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].


 


Attribution: Company statement, story written by Bob Dey for this website.

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AMP fuels Capital speculation by announcing end to speculation

Published 19 February 2006


AMP Property Portfolio Investments Ltd fuelled more speculation on Friday by announcing an end to speculation.



“Expect no new offer within the next 12 months,” if AMP doesn’t reach the 90% threshold for compulsory acquisition under the current offer, general manager Stephen Costley roared.


The current offer closes on Sunday 26 February – no more extensions – and Mr Costley said AMP held 89% of Capital. The aggressive tone was a fair indication that AMP yet again wanted to bully recalcitrant shareholders into meekly selling, as happened when the AMP unit announced a cut in dividend ratio and on the numerous occasions it’s warned the share price is likely to drop post-bid.


Mr Costley’s statement on Friday was a sign that that last 1% could be elusive, leaving AMP with the nuisance of things like listing fees & the issues associated with governing & operating a listed body instead of a private company, which are likely to cost more than a raised buyout price.


What are those last shareholders holding out for? Are they hoping to needle AMP? Are they hoping that by being difficult they’ll get some better under-the-table settlement? And in response, will AMP stubbornly resist dealing with recalcitrants if somehow the way is cleared for full Capital ownership? One can speculate. “While we are now only 1% away from the 90% threshold for compulsory acquisition and there is still a week to go until the final close of the offer, we have taken this decision and announced it publicly to provide absolute clarity to the market about the likelihood of a fresh offer in the near term.


“Recent statements by some commentators may have led remaining shareholders to expect an imminent higher offer if AMP Property Portfolio does not reach the 90% threshold. This is a false expectation and reliance on it could have negative financial consequences for those shareholders,” Mr Costley said.AMP has already outlined changes at Capital. “In line with its new focus on growth in assets/share rather than just dividend yield, Capital Properties’ future dividend payout will be 6-monthly with a payout ratio of between 40-60% of net earnings. In this context, other listed property companies may offer better alternatives for shareholders seeking property exposure with a focus on dividend yield.”In addition, Capital Properties’ independent directors said in a 1 February letter to shareholders that if acceptances under the present offer don’t reach 90%, “it is likely that the share price could trade below the $1.48 offer price for some time into the future”.”So remaining minority shareholders need to be aware that the value of their investment is likely to decline and they may have difficulty trading out of that position because only 11% of shares would be freely tradeable on the NZSX,” Mr Costley said.Earlier stories:


12 February 2006: AMP within 1.2% of Capital Properties compulsory acquisition


1 February 2006: AMP just short of 90% of Capital Properties


14 January 2006: AMP extends Capital bid to 31 January


11 January 2006: ING holds trump at Capital Properties


 5 January 2006: AMP cuts Capital dividend ratio


24 December 2005: AMP extends Capital bid to 13 January


26 November 2005: Outcome of Capital Properties review out in January


4 November 2005: Capital directors suggest $1.55 OK as takeover price, and AMP works at belittling them


28 October 2005: AMP has 36% of Capital as Kiwi accepts 6c higher offer


23 October 2005: AMP tells Capital what should have been in Deloitte report, extends offer another week


 


If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].


 


Attribution: Press release, story written by Bob Dey for this website.

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AMP within 1.2% of Capital Properties compulsory acquisition

Published 12 February 2006


AMP Property Portfolio Investments Ltd said on Friday it had 88.84% of takeover target Capital Properties NZ Ltd. The $1.48/share takeover bid closes on Sunday 26 February.



AMP Property Portfolio general manager Stephen Costley said: “We now only need acceptances representing 10% of shares outstanding and we continue to see acceptances tracking at a rate that gives us confidence that we’ll reach the 90% threshold required for compulsory acquisition.”


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Attribution: Company statement, story written by Bob Dey for this website.

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AMP just short of 90% of Capital Properties

Published 31 January 2006


AMP Property Portfolio Investments Ltd said today it had 88.16% of Capital Properties NZ Ltd, just short of the compulsory acquisition benchmark of 90%. It still had the afternoon returns to add to that figure before its $1.48/share bid closed.


 


Earlier stories:


14 January 2006: AMP extends Capital bid to 31 January


11 January 2006: ING holds trump at Capital Properties


5 January 2006: AMP still below 85% of Capital


24 December 2005: AMP extends Capital bid to 13 January


 


If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].


 


Attribution: Company statement, story written by Bob Dey for this website.

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AMP makes last extension in Capital bid

Published 1 February 2006


Capital Properties NZ Ltd’s independent directors’ committee of Michael Cashin & James Ogden have finally conceded that AMP Property Portfolio Investments Ltd is likely to get the 90% of Capital required to enable compulsory acquisition. But the 2 directors reiterated their view that AMP was getting Capital cheap at $1.48/share.



AMP got to 88.16% of Capital on Tuesday and extended its offer for the remaining shares to Sunday 26 February, the last extension it can make.


Earlier stories:


1 February 2006: AMP just short of 90% of Capital Properties


14 January 2006: AMP extends Capital bid to 31 January


11 January 2006: ING holds trump at Capital Properties


5 January 2006: AMP still below 85% of Capital


24 December 2005: AMP extends Capital bid to 13 January


 


If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].


 


Attribution: Company statement, story written by Bob Dey for this website.

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