Kiwi Property profit falls by 43%
Kiwi Property Group posted a 43 per cent fall in annual profit as the value of its property portfolio rose at a slower pace than a year earlier.
Net profit fell to $143 million in the 12 months ended March 31, from $250.8m a year earlier, the Auckland company said.
The difference was largely due to a $41m increase in the fair value of Kiwi Property’s portfolio in the latest financial year, compared with a $175.9m boost in 2016. Funds from operations, the company’s new preferred earnings measure that strips out a number of items including fair value movements, rose 13 per cent to $102.8m.
“While the property sector is currently strong, we do expect the high level of value growth we have witnessed in recent years for investmentgrade real estate to begin to moderate as interest rates continue to rise from historic lows,” said chairman Mark Ford.
“Supportive economic and property market fundamentals, in combination with the robustness of our property portfolio, provides us with confidence the company will continue to deliver a strong financial performance.”
Kiwi Property has been selling properties to fund development plans, including expansion of its Sylvia Park, New Lynn and Westgate sites in Auckland. However, its bid to sell two Wellington properties to NPT and buy the smaller company’s management con- tract failed last month.
The company will pay a fullyear dividend of 6.75c a share, up from 6.6c a year earlier. It projects that will increase to 6.85c in the 2018 financial year.
The value of its property portfolio rose to $2.97 billion at March 31 from $2.67b a year earlier, due largely to the acquisition of a half-stake in Waikato Tainui-owned The Base retail site near Hamilton.
Its 14 retail and office properties lifted their weighted average lease terms to 5.6 years from 5.1. Net rental income rose 17 per cent to $182.5m.