Augusta Capital posted a 28 per cent drop in first-half profit as the listed property investor and fund manager paid more tax, faced higher costs due to the sale of its Auckland Finance Centre, and wrote down the value of its stake in listed property investor NPT.
Profit fell to $5.2 million in the six months ended September 30, from $7.2m in the year-earlier period, the Auckland-based company said in a statement. Its tax expense lifted to $1.3m from $500,000 a year earlier, it booked $1.38m of costs linked to the $96m sale of the Finance Centre, and it wrote down the value of its 9.3 per cent investment in NPT by $675,000 to $10.3m.
Augusta has been rejigging its business, diversifying into funds management last year when it bought KCL Property and Investment Property Titles. Since then it has been focusing on property syndication to grow that funds management business, which it sees as less demanding on capital than direct property investment, and it now manages 135 property vehicles worth more than $1.51 billion.
It bought the stake in NPT as part of a plan to get NPT to buy three buildings worth $329m, with Augusta buying the management contract.
Augusta is seeking a special meeting of NPT shareholders where it wants to put forward its proposal and is also seeking to oust NPT chairman John Anderson and directors Jim Sherwin and Tony Sewell, replacing them with its own chairman, Paul Duffy, and independents Bruce Cotterill and Allen Bollard. The meeting is planned for February next year, but Augusta said today that it's trying to push for an earlier date.
In the latest first-half period, Augusta's revenue rose 25 per cent to $13m, mostly due to the performance of the funds management business, party offset by lower rental income, the company said.
In the funds management unit, revenue from recurring fees increased 82 per cent to $2.93m, while deal fees rose 58 per cent to $4.67m. Revenue from the investment property portfolio slipped 8.7 per cent to $3.05m.
The company booked a $3.22m gain in the value of its investment properties, compared with a $3.78m gain in the year-earlier period.
Augusta's weighted average lease term for its directly owned property at September 30 fell to 5.7 years from 6.3 years at March 31, and its portfolio occupancy was unchanged at 97 per cent, it said.
The company expects its annual dividend for the year to total 5.5 cents per share, up from 5 cents the previous year.
Its shares gained 2 per cent to $1.02.