Argosy annual profit more than doubles on revaluations, upbeat on 2015
By Paul McBeth
May 21 (BusinessDesk) - Argosy Property, which last year raised $86.9 million to fund acquisitions, more than doubled
annual profit as new buildings generated more income and the value of its property portfolio and financial instruments
gained.
Net profit climbed to $85.6 million in the 12 months ended March 31 from $39.2 million a year earlier, the
Auckland-based company said in a statement. The bottom line was bolstered by a $33.5 million gain in the value of its
investment property and a $20.6 million increase in the value of derivatives used for hedging. Net property income rose
18 percent to $82.2 million as Argosy’s portfolio expanded to 66 buildings from 63 buildings a year earlier.
Distributable income, the preferred measure by property investment firms as it strips out movements in the value of
their portfolios, rose to $50 million, or 6.69 cents per share, from $42.2 million, or 7.22 cents, a year earlier.
“Rates of enquiry are at levels that Argosy has not experienced since prior to the global financial crisis and there are
signs of rental growth ahead,” the company said. “The management team will continue to focus on the leasing fundamentals
as well as positioning the portfolio for the future.”
Argosy has been selling underperforming assets over the past year, while refocusing its energy to what it calls its core
portfolio, which it sees as long-term investments of more than a decade. That includes two Wellington buildings it
acquired last year, which it’s spending $86.6 million on upgrading.
The board declared a final quarter dividend of 1.5 cents, payable on June 24 with a June 10 record date, taking the
annual return to shareholders to 6 cents per share.
Argosy’s expects to pay the make at least the same annual dividend payment in the 2015 financial year.
“It is anticipated that this will marginally exceed net distributable income in the 2015 year as Argosy returns to a tax
paying position,” the company said.
The shares rose 1.1 percent to 95.5 cents yesterday, and have increased 4.4 percent this year. The stock is rated an
average ‘hold’ based on five analyst recommendations compiled by Reuters, with a median target price of 96 cents.
Argosy’s portfolio was valued at $1.23 billion was at March 31 compared to $976.9 million a year earlier. The company’s
occupancy rate rose to 98.7 percent from 94.5 percent a year earlier, and the weighted average lease term increased to
5.68 years from 5.24 years.
The company’s industrial buildings generated profit of $38 million on income of $27.1 million, bolstered by a
revaluation gain, compared to earnings of $11.23 million on revenue of $20.7 million in 2013.
Its office buildings reported profit of $39.1 million on income of $27.4 million, up from earnings of $33.8 million on
income of $22.1 million. Its retail sector reported profit of $37.3 million on income of $26.3 million, compared to
earnings of $32.3 million on revenue of $25.2 million.
(BusinessDesk)