Earnings up but value down for National Property

The National Property Trust reported an 11.3 per cent annualised increase in net distributable earnings to $9.6 million, as rental income rose although occupancy rates dropped.

The company said the result compared favourably in the current economic environment with the $7.2 million for the 10 months to the end of March 2008. The 10-month reporting period was due to a change in balance date.

But the trust's portfolio declined 9.1 per cent in value over the past 12 months to $266.8 million, a reduction of $28.1 million for the year.

That coupled with unrealised fair value swap losses of $8 million at balance date, resulted in an after-tax loss for the year of $21.3 million. In the 10 months to the end of March 2008 the trust made a net profit of $18.4 million.

The trust made dividend distributions in the year to March of 5.01c per unit, and is forecasting 4.5cpu for the current financial year.

With its $120 million bank debt facility due to expire in November 2009, the trust had sought a new arrangement, accepting an offer from BNZ for a new $110 million bank facility, running to November 2011.

But increased bank margins would have an adverse impact of about 0.9c on dividend distributions, partly offset by increased rental income, the trust said.

In the latest year net rental income grew by 3.2 per cent, after adjusting for the sale of a property, to $21 million, despite the occupancy rate dropping from 97.1 per cent to 95.8 per cent.

Kevin Podmore, chairman of trust manager The National Property Trust, said the result was driven by solid underlying operating performance.

The market remained challenging and difficult conditions were expected to prevail for some time yet, he said.

"The defensive attributes of the trust's spread portfolio come into play in these times."

The portfolio includes commercial, retail and industrial properties, and is spread through Auckland, Napier, Tauranga, Wellington and Christchurch.

National Property Trust units closed up 2c to 35c yesterday, having ranged between 30c and 53c in the past year.

- NZPA