Kiwi Income Property Trust half year profit up

Kiwi Income Property Trust today announced a 5.1 per cent lift in its half year profit and said it expected an increased full year result.

The property development and management trust posted a first half net profit after tax of $25.2 million 5.1 per cent over the same period last year.

Total operating revenue for the six months to September 30 at $41.98 million was up 17.1 per cent on last year.

The trust will pay an interim gross interim dividend of 4.34 cents per unit including 0.81 cents per unit in imputation credits on December 17.

Trust chief executive Angus McNaughton said an expansion of the trust's property portfolio, a good performance by its retail portfolio, strong leasing activity and positive rent reviews over the period had raised its earnings expectations for the full year.

"As a consequence the trust is now projecting a gross dividend of between 8.60 to 8.70 cents per unit for the full year to 31 March 2005, an upward revision of its 2004 Annual Report projection of between 8.40 to 8.60 cents per unit," Mr McNaughton said in a statement.

The improved financial position would also allow the trust to retain 2 to 5 per cent of net earnings to assist in its on-going financing.

Mr McNaughton, said the strong result and the higher dividend projection "reflected the quality and diversity of the Trust's portfolio and the effectiveness of its management strategy".

The trust said its net rental revenue increased by 17.2 per cent to $41.7 million compared to the same period the previous year.

Total assets at September 30 were $1.11 billion, secured borrowings amounted to $261.5 million and investors' funds were $797.6 million up $52.0 million on the previous corresponding period.

Mr McNaughton said the retail and office portfolios had both performed well and the trust was enjoying the benefits of re-weighting its portfolio towards the high performing retail sector.

He said the trust's office portfolio had benefited from robust market conditions, extensive leasing activity and positive rent growth.

Rents and yields had continued to improve in Auckland, while in Wellington quality office space remained at a premium, underpinning positive rental growth.

Mr McNaughton said the first half had been a period of solid achievement for the Trust and the outlook for the next six months was very positive.

Mr McNaughton said nothing about last week's stand in the market in which the trust snared 19.9 per cent of Wellington firm Capital Properties.

Kiwi laid out $53.4 million to grab 46 million Capital Properties shares at $1.15 each.

Kiwi Income Property Trust units were unchanged at $1.10 each in early afternoon trade today.

- NZPA