NPT, the listed property investor, posted a 63 per cent drop in annual profit after some of its properties reduced in value and it faced extra costs from a proposed deal with Kiwi Property Group that didn't proceed.
Net profit fell to $3.1 million, or 1.9 cents per share, in the 12 months ended March 31, from $8.4m, or 5.19 cents, a year earlier, the Auckland-based company said in a statement. The earnings included a $1.7m reduction in the company's property portfolio, compared with a $3.2m gain a year earlier, and fees of $1.3m related to assessing property proposals. Revenue edged up 1 per cent to $17.2m.
NPT's board has been overhauled since shareholders voted last month to reject the company's proposal to hook up with larger property investor Kiwi Property Group, and instead favoured a proposal by rival property company Augusta Capital to block the deal and appoint three new directors to the board. The new board is undertaking a thorough analysis of the business plan for the current financial year and expects to update shareholders by the annual meeting in August, it said today.
"Clearly, the financial results for FY17 must mark a turning point for NPT as far as this board is concerned," said newly appointed NPT chair Bruce Cotterill. "There are still a number of challenges ahead of us that are mostly a consequence of a lack of scale. The board is committed to improving returns to shareholders and is focused on advancing the necessary steps in support of this goal as quickly as practical. Once a plan for NPT's future is sufficiently developed, the board looks forward to engaging with shareholders to seek their views before moving forward with any significant course of action."
NPT will pay a fourth quarter dividend of 0.9 cents per share on June 16, taking the annual dividend to 3.6 cents, up from 3.5 cents last year. When reporting its earnings last year, the company forecast payments for the year just ended of 3.7 cents. The new board will provide guidance on the dividend for this year once it has completed its analysis of the 2018 business plan.
In the past year, NPT's gross rental income advanced 1 per cent to $17.2 million, its occupancy rate slipped to 96 per cent from 97.1 percent, and its weighted average lease term declined to 4.6 years from 5.4 years.
NPT warned that it will face a further $348,000 of costs in the current financial year related to the Kiwi Property proposal and with assessing other proposals received by the company. The costs related primarily to legal fees, due diligence work, financial analysis and holding the special meeting of shareholders last month, it said.
The company's shares last traded at 61 cents, and have dropped 5.2 per cent the past 12 months.