Argosy Property returns to profit
Argosy Property has returned to profit for the first half of the year, now that its bottom line doesn't wear the $28.2 million it cost it last year to internalise the firm's management contract.
The real estate investor reported a net profit of $5.9m for the six months ending September, up from a loss of $19.3m in the same period a year ago.
This puts the result just shy of the $6m interim net profit reported in 2010.
Total income fell 2.8 per cent to $34.6m in the period, but that was off a portfolio with 15 fewer properties than a year ago. Total expenses - excluding management rights buy-out, an unsolicited merger bid and the write-down of a management contract costs - fell 17 per cent to $3.8m.
"It is pleasing to report that the momentum generated by internalisation and corporatisation in the prior period has continued over the first six months of this year," said chief executive Peter Mence.
"The cost savings from internalisation have been considerable and are in line with that originally indicated to shareholders."
Distributable income, the performance measure preferred by property investors, rose 29 per cent to $20.2 million.
The firm reported a quarterly dividend of 1.5 cents per share, with a record date of December 13 and payable December 21, putting it on track for a 6c per share final payment at the end of the year.
The firm said was starting to see signs of improvement in the property market, particularly in Auckland, although earnings from its Wellington portfolio are expected to remain subdued due to insurance cost increases.
As at the record date the firm's occupancy rate rose to 96.3 per cent from 94.1 per cent, and outstanding lease expiries for the period to March 31 were reduced to 7 per cent from 17.9 per cent as at 31 March 2012.