Goodman dividend rises 1pc

John Dakin says the trust has sold properties for more than $100 million.

Investors in Goodman Property Trust will get more money next month but face lower distributions next year.

The trust, New Zealand's largest listed industrial landlord with a market capitalisation of $676 million, has property assets valued at $1.5 billion.

Yesterday, it announced the first loss since being taken over by Goodman of Australia which manages it and has a 28 per cent cornerstone shareholding.

But property devaluations drove the final result down and distributable profit was still up, allowing the trust to pay unitholders more.

After last year's $99.3 million profit, the Queen St-headquartered business recorded a $74.1 million loss in the year to March 31, 2009.

John Dakin, chief executive of the trust's manager, said the numbers frustrated him because the loss was only taken into the bottom-line to comply with accounting rules.

That point was backed up by analyst Jeremy Simpson of Forsyth Barr who described the figure as "meaningless".

Dakin said the trust had achieved its distributable earnings target of $83.8 million and on June 18 would pay investors a dividend of 10c per unit, 1 per cent up on last year.

But next year's distributable earnings could drop and guidance from the trust for that result indicates less money for investors. Operating earnings could be 5 per cent to 10 per cent down in the next 12 months.

"We have not forecast distributions for the year to March 31, 2010," Dakin said yesterday.

Brokers are forecasting 9c per unit to 9.5c per unit reflecting the impact of rising interest rates, asset disposals and a less rosy outlook for the trust's growth and development.

Simpson praised the trust's result calling it solid and entirely what the market expected. He put an "accumulate" recommendation tag on the trust last month saying the trust was factoring in falling portfolio values.

Simpson yesterday noted capital raising moves by Kiwi Income Property Trust and AMP NZ Office Trust which have collectively called for $251 million but he said it did not appear the trust needed to make such a move.

Dakin said the trust had sold properties for more than $100 million.

This consisted of completed asset sales of $50.6 million combined with conditional contracts on sales for $57 million.

"For us, that's the best source of new equity," Dakin said, referring to his preference for sales rather than rights issues or other calls.

Full-year results are due out today from Kiwi and Kermadec Property. Goodman yesterday closed up 2c at 82c.