Asset sales & revaluations lifted Stride Property Group’s profit for the September half, but reduced net rental income.
$23.6 million of revaluations lifted portfolio value by 2.7% to $934.5 million. 3 properties were subject to desktop reviews and 14 to full valuations as at 30 September.
Stride chair Tim Storey & chief executive Philip Littlewood said completed asset disposals & higher valuations had contributed to a lower bank loan:value ratio of 34.2% and higher net tangible asset backing
They expect management fee income to be higher over the second half as development activity on committed projects increases.
A stapled security of the Stride Property Group comprises one ordinary share in Stride Property Ltd & one ordinary share in Stride Investment Management Ltd. The group continues to investigate adding more funds to its management portfolio.
Results for the September half-year (September 2017 results in brackets):
- Net rental income $27.9 million ($29.5 million), lower primarily due to the divestment of 3 Bunnings-operated properties to Investore Property Ltd and sale of the development at Springs Rd, East Tamaki
- Pretax profit up 13.5% to $44.1 million ($38.8 million)
- After-tax profit up 20.8% to $40.2 million ($33.3 million)
- Net distributable profit down 0.7% to $19.6 million ($19.7 million) or 5.37c/share (5.41c/share)
- Net tangible assets/share up 3% since March to $1.88, excluding value of management contracts ($1.82 at 31 March)
- Loan:value ratio 34.2% consistent with March, down from 38.8% in September 2017
- Targeting a combined 9.91c/share cash dividend for the full year
- Occupancy up 2.2% to 98.9% (96.7%)
- Weighted average lease term maintained at 5.1 years
- Significantly improved lease expiry profile for the next 2 years, reducing from 18.7% in March to 12.2% in September
- Total leasing transactions, including rent reviews, renewals & new lettings completed across 21% of the portfolio resulted in a total annualised rental increase of 6.3%
- Market reviews comprised 10% of the total annualised rental and resulted in an increase of 11.5%
- Comparable sales for the year to September up 11.5% at NorthWest Shopping Centre & 4.0% at Silverdale Centre
- Net property portfolio valuation gain of $23.6 million, or 2.7%, to $934.5 million ($902.2 million)
Developments, acquisitions & divestments:
- East Tamaki, 11 Springs Rd, construction of a new head office for Waste Management NZ Ltd, practical completion expected late 2019
- Tauranga, Bay Central Shopping Centre, $4.7 million expansion for Rebel Sports & Briscoes premises, new 10-year leases
- 3 Kings, 2 Carr Rd, post-balance date, $6 million upgrade of Bunnings premises in early stages of development
- Avondale, 439 Rosebank Rd, unconditional contract signed to buy property for $8 million, completion expected July 2020
- Albany, 33 Corinthian Drive, ASB technology & innovation hub, sale process started post-balance date
12 September 2018: Stride outlines plans for commercial property funds
6 May 2018: Stride’s Springs Rd redevelopment for Waste Management goes unconditional
26 March 2018: Investore settles 2 property sales
2 March 2018: Stride’s 3-property sale to Investore settles
Attribution: Company release.