Higher profit for Property For Industries

GREG NINNESS
Last updated 11:34 17/02/2014
PFI 1.355 -0.01 -0.37%
PFI

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Property For Industry has reported a higher than expected tax-paid profit for the year to December 31.

The $40.5 million profit, up from $26.9m the previous year is the first since PFI merged with Direct Property Fund last year, and was achieved on total operating revenue of $48m, increasing from $29.4m.

The distributable profit was up 0.62 cents per share to 7.26c, which is 3.1 per cent higher than forecast in the pre-merger information memorandum.

PFI will pay a final cash dividend 2.01c per share, bring total cash dividends to 7.2c per share for the year. The dividend will be paid on March 12.

PFI's dividend reinvestment scheme will remain suspended and the board will assess every three months whether to restart the scheme.

The dividend policy has been amended to pay out 95 per cent to 100 per cent of distributable profit, compared to 100 per cent previously.

Chairman Peter Masfen said he expected cash dividends to be about 7.25c per share next year, "subject as always to economic conditions."

The property portfolio increased in value by 2.4 per cent to $841.8 million.

That, combined with an increase in the value of interest rate swaps, changes in deferred tax and other gains, saw PFI's net tangible asset backing increase 8.4 per cent to $1.23 per share, compared with the pre-merger forecast of $1.19 per share.

As at December 31, the company owned 83 properties,with 136 tenants providing annual contract rent of $65.4m.

The vacancy rate was 2.9 per cent and the weighted average lease term was 5.31 years compared 4.8 years at the previous year's end.

"High occupancy rates, stable cash flows and increases in capital value have resulted in positive sentiment towards industrial property," the company said.

"It is expected that this positive sentiment will continue to benefit PFI, with the larger entity also benefiting from an increase in diversification of geography, property and individual tenancy risks as a result of the merger.

The company said it started the year by disposing of a non-core property at 174B Marua Rd for $2.2m, and would consider selling further non-core properties and reinvesting the capital into core industrial properties.

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- Fairfax Media

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