Investore to keep dividend intact as Covid disruption limited

Investore's tenants include Countdown supermarkets and Bunnings hardware stores. Photo / John Stone

Investore Property expects to maintain its dividend payments in the coming year having largely shrugged off the impact of the Covid-19 pandemic, with more than three-quarters of its portfolio occupied by 'essential' services.

The large-format retail property owner paid annual dividends of 7.6 cents per share in the March year and expects to pay the same again in the coming year provided the economy doesn't fall apart.

Investore – whose tenants include Countdown supermarkets and Bunnings hardware stores – said it expects gross rent to fall by between $1 million and $2m in the year ending March 31, 2021, although that's more than offset by a $2.2m gain from the reintroduction of building depreciation deduction tax claims.

The property investor said it expects to offer deferred rent to some tenants, structured in a way to be repaid by the end of March.

Chair Mike Allen said Covid-19 had had a limited impact on the business because most of its tenants were essential services such as supermarkets, pharmacies and hardware stores.

The property investor completed the purchase of three properties after the March 31 balance date, and its 43 properties were valued at $895.2m. It has 130 tenants and a weighted average lease term of 10.4 years, with an occupancy rate of 99.7 per cent.

Investore reported a net profit of $28.6m in the 12 months ended March 31, down from $38.6m a year earlier, due largely to a smaller increase in the fair value of the property portfolio. Distributable profit after tax – which dividends are based on – increased 0.8 per cent to $21.1m.

The shares opened unchanged at $1.71, down 6 per cent so far this year.