NPT Limited Announces Annual Result & Realisation of $32.5 M

NPT Limited Announces Annual Result & Realisation of $32.5 Million from Damaged Christchurch Property

Highlights for the 2012-2013 year for NPT Limited are:

Material Damage claim for 195 Hereford Street, Christchurch settled at $29 million + GST, and sale of property to the Crown at $3,500,500 + GST
Portfolio valuation gain of $11.3 million over 12 months
Rejuvenation of Christchurch’s Eastgate Shopping Centre
Weighted Average Lease Term (WALT) as at 31 March 2013 is 5.71 years
Head Office move from Wellington to Auckland
Trading profit of $3.811 million
Net Profit after Tax of $32.993 million includes above gains
Dividend for final quarter is 1.15cps
Net Asset Value (NAV) increased from 54 cents per share at 31 March 2012 to 71 cents per share at 31 March 2013.

Material Damage Claim for 195 Hereford Street Christchurch Settled

NZX-listed property company, NPT Limited, has announced it has reached agreement with the company’s insurers to settle its material damage claim for its earthquake-damaged central Christchurch property, 195 Hereford Street. The property was valued at 31 March 2013 at $12 million. Settlement of the Material Damage claim is $29 million plus GST, and the settlement process for payment will begin on 31 May 2013.

During the Material Damage negotiations, CERA introduced the blueprint for the reconstruction of central Christchurch that includes the acquisition of properties within the city blocks known as the ‘Eastern Frame’. NPT’s property is located within the “Eastern Frame” and it has been sold to the Crown as part of the Crown’s acquisition process. The agreement, which was concluded after mutually satisfactory negotiations with CERA, provides for a purchase price of $4,160,500 plus GST with the Crown assuming liability for the demolition of the building. The demolition cost of $660,000 plus GST will be deducted from the settlement with the net payable to NPT. Settlement for the sale will be in early June 2013.

NPT’s chairman Sir John Anderson says, “The Company has been negotiating with the insurers for more than two years on this Material Damage claim. Reaching this settlement, as well as the sale of the property to the Crown, is very good news for NPT and its shareholders. We are still, however, negotiating with the insurers on our business interruption claim; we look forward to a timely settlement of that claim.”

Property Portfolio

NPT’s property portfolio of Retail, Commercial and Industrial property has increased in value by $11.3m over the 12-month period. The portfolio was valued at $116.35 million at 31 March 2013.

Sir John says, “This year has seen a consolidation of the Company’s property portfolio.  During the 2012-2013 year the company sold two properties – Napier retail property Ocean Boulevard and Wellington commercial property 342 Lambton Quay. NPT also terminated its head leases over Christchurch’s Avonhead Shopping Centre and on Hornby’s HWMC Warehouse property.”

Eastgate rejuvenation

A major highlight for the Company has been the rebuild, repair and rejuvenation of Christchurch’s Eastgate Shopping Centre after the damage sustained in the 2011 earthquakes. The Centre’s value is up 24.37% in the 12 months from $35.5 million to $44.15 million, a rise of $8.65 million.

In April 2012  Eastgate received independent assessments confirming that the complex met new seismic standards. Eastgate has benefited from strong management and leasing activity by Jones Lang La Salle with major leases signed with Lincraft, PaperPlus and Number One Shoes. In March the Linwood Library and Service Centre signed a three year lease, with a two year right of renewal for a 1,500m2 space on the first floor. The Mayor of Christchurch, Bob Parker, formally opened the library in late April.  These new leases have significantly increased the value of this property, and there are more leases and developments in the pipeline.

The company’s Christchurch industrial property, Print Place in Middleton has risen in value 7.2%, up from $12.5 million to $13.4 million over the period, following an eight-year lease take up by the Canterbury District Health Board.

Hastings’ Heinz Wattie’s National Distribution Centre rose in value 9.09% for the period, up to $27 million from $24.75 million as at 31 March 2012. This is a reflection of the 15-year lease to Heinz Wattie’s (to 2027) that was signed in 2012.

Auckland’s AA Centre in Albert Street recorded an increase in value to $31.8 million from $28.5 million, up 11.58%.  During 2012-13 there was a new six-year lease with AA Insurance, and the Department of Internal Affairs signed a three-year lease renewal.

Weighted average lease term

The weighted average lease term (WALT) has increased to 5.71 years as at 31 March 2013, up from 3.4 years at 31 March 2012. This significant rise is reflective of the strong leasing activity undertaken by NPT over the year, the hard work of the company’s leasing team, strong tenant demand and confidence in the company’s properties.

Head Office Move to Auckland

In March this year the company moved its head office from Wellington to Auckland. NPT’s Board believes the move will bring efficiencies and flexibility to the company’s operations and be closer to where it sees future growth opportunities.

The company has also announced the confirmation of the appointment of Kerry Hitchcock as Managing Director. “Kerry has been acting in this role for the last two years. He has rationalised the company’s property portfolio, negotiated the Christchurch settlements and reorganised the company’s operations. It’s good to have him formally accept the position so the company can now focus on opportunities that will create strong returns for shareholders,” says Sir John.

Financial Results for 31 March 2013

The company has recorded a net profit after tax of $32.993 million for the year ended 31 March 2013, compared with $2.288 million for the previous year. This considerable profit increase is largely attributable to the rise in portfolio valuation, and to the proceeds of the material damage claim and sale of 195 Hereford Street.

NPT’s trading profit is $3.811 million for the 2012-2013 year, compared with a $9.94 million trading profit for the year ended 31 March 2012. “The company’s trading profit has, for the reporting period, experienced a one-off drop due to the restructuring of its property portfolio which, when combined with the impact of the Christchurch earthquake, has seen a reduction in rental income and bank interest. Given the sale of the Wellington and Napier properties, and that the business interruption insurance claim for 195 Hereford Street is yet to be settled, this is a realistic financial performance for what’s been a challenging period. We’re confident the trading profit will be restored to a higher maintainable level in the current year,” says Sir John Anderson.

Net Asset Value Per Share Materially Increases

The settlement of the insurance claim for 195 Hereford Street and the revaluation of the company’s properties has had a material positive impact on the net assets of NPT.  These have increased by $20 million as a result of the insurance settlement and $11.3 million from property revaluations.  Shareholders’ funds have increased from $87.162 million as at 31 March 2012 to $114.334 million at 31 March 2013.  This is an increase of the Net Asset Value per share from 54 cents to 71 cents per share.

Dividends

Shareholders will receive a dividend of 1.15 cents per share for the quarter ended 31 March 2013, bringing the total distribution for the 2012-2013 year to 3.00 cents per share. This is 0.8 cents per share above the forecasted distribution earlier this financial year. The record date will be 5pm on 20 June 2013 with payment being made on 4 July 2013. Looking ahead to the 2014 year, the directors expect a distribution of 3.2 cents per share with imputation credits attached where available.

Looking Ahead

Sir John concludes, “The past year has seen consolidation of the Company’s property portfolio and solid leasing activity which has put NPT in a solid position for 2013-2014.  This, together with the insurance proceeds and sale of 195 Hereford Street, will put the company into a strong financial position.  

"The 2013-2014 financial year will be an exciting period for NPT. The Company’s strategy is to focus on investment where the property type and scale create management cost efficiencies, and fit NPT’s yield and growth requirements, that will provide rewarding dividends for shareholders.  The company’s management has a number of significant proposals in the pipeline and we are all looking forward to a year of strong activity and positive returns for its shareholders.”

ENDS

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