Higher fees, interest drag Investore's first-half profit down 14%

Monday 19th November 2018

Investore Property’s first-half net profit fell 14 percent as management fees increased, its interest bill rose and the value of its properties fell.

The supermarkets and other large retail store investor’s net profit for the six months ended Sept. 30 fell to $10 million from $11.6 million in the same six months last year.

The manager’s fees, including items such as building management and leasing fees, rose 13 percent to $2.5 million while interest costs rose 23.9 percent to $7.2 million.

The manager says the value of Investore’s properties fell by 0.1 percent but the figures it presented show the portfolio was worth $740.4 million at Sept. 30, up from $738.3 million in March and last year’s first-half report shows the portfolio was worth $662.7 million at September 30 last year.

However, distributable income after tax rose by $0.4 million to $10.8 million as net rental income rose $2.1 million to $24 million in the six months and the payout for the September quarter rose to 1.865 cents per share from 1.86 cents in the same quarter last year.

The manager says Investore’s $100 million six-year retail bonds sold in April have helped extend the maturity of its debt and that the board is considering additional capital management initiatives which may include a second bond sale.

Investore’s manager also extended the maturity of $70 million of bank debt to 2022.

Investore’s loan-to-valuation ratio at Sept. 30 rose to 42.2 percent, up from 39.4 percent a year earlier but still well shy of the policy maximum of 48 percent.

The manager confirmed previous guidance that the full-year payout is estimated to be 7.46 cents per share, up from 5.35 cents last year.

It says the weighted average lease term eased to 12.6 years from 13.1 years and occupancy remains at 99.9 percent. At Sept. 30, 81 percent of its leases expire after the year ending March 2030 and that increased to 83 percent with the signing of a lease renewal at Countdown Rotorua after balance date.

The manager says it will continue to focus on its development and refurbishment programme.

(BusinessDesk)

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