Slight improvement for Capital Properties

By Phil Boeyen, ShareChat Business News Editor

Monday 21st May 2001

Property investor Capital Properties (NZSE: CNZ) has recorded an 8% lift in full-year operating profit before unusual items and writedowns.

For the year ended March, Capital Properties had an operating surplus of $14.2 million compared with $13.1 million last year. Sales revenue increased to $53 million from $35 million and earnings per share rose from 10.98 cents to 11.9 cents.

However the company says a difficult economic environment was reflected in a writedown of $12.9 million on its investment property values, equivalent to a decrease of 3.6%.

The company also recorded a book loss of $600,000 on the sale of its 16-level City Tower property in Wellington. The property was on the books for $10 million but was sold for $9.4 million in February.

"This resulted in a net surplus of $0.6 million compared to a net deficit of $6.6 million for the comparable period last year," the company says in a statement.

Although a fourth quarterly dividend of 2.4 cents per share will be paid to bring the year's total to 9.6 cents, Capital Properties says gross dividends are expected to be lower in the current financial year due to the sale of City Tower.

However the company's directors say a gross dividend yield of 10% on current share prices will be sustainable in the medium term.

CNZ says the weighted average lease term of its portfolio is currently 5.2 years and the vacancy rate is 3.9%, while occupancy on the Shortland Centre Tower II currently stands at 70%

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