Announcement
HALFYR: APL: Result for the six months ended 30 September 2021
08:31am
APL
29/11/2021 08:31
HALFYR
PRICE SENSITIVE
REL: 0831 HRS Asset Plus Limited
HALFYR: APL: Result for the six months ended 30 September 2021
NZX release
Result for the six months ended 30 September 2021
29 November 2021
o AFFO in line with corresponding period at $2.57 million
o Settlement of Eastgate deferred to 1 April 2022
o Munroe Lane progressing well, but completion delayed to March 2023 due to
COVID-19 impacts
Asset Plus Limited today announced its interim financial results for the six
month period ended 30 September 2021, reporting total comprehensive income
after tax of $2.52 million, down from $11.53 million in the prior
corresponding period. No revaluations were commissioned in the half year,
unlike the prior corresponding period.
Adjusted funds from operations (1) decreased by $0.06 million to $2.57
million primarily due to reduced income at 35 Graham Street, partially offset
by lower impacts of COVID-19 and rental abatements offered to tenants
compared to the prior period.
Asset Plus Limited's Chairman, Bruce Cotterill, said "The last six months
have been challenging, and COVID-19 has once again impacted our business.
Leasing efforts continue at both Munroe Lane and 35 Graham Street, but we
have been hindered in our efforts to date by ongoing disruptions as a result
of the pandemic. It is likely that securing tenants across both properties
will take longer than originally anticipated."
Key points:
o Portfolio occupancy declined due to reduced Auckland Council footprint at
35 Graham and associated rental reduction from late June 2021
o The WALE (2) is now 2.65 years, which has decreased from 2.75 years at 31
March 2021
o Loan to value ratio increased to 15% due to ongoing capital expenditure at
the Munroe Lane development (5.4% at 31 March 2021)
o Net tangible assets (NTA) of 44.5 cents per share as at 30 September 2021
(44.8 cents as at 31 March 2021)
o Munroe Lane development target completion date delayed by COVID-19 lockdown
to March 2023
o Active leasing campaigns underway for both 35 Graham Street and Munroe
Lane, however it is expected that leasing will be delayed as a result of
ongoing COVID-19 impacts
Centuria NZ CEO Mark Francis commented, "Asset Plus has clear objectives to
complete the development of Munroe Lane and lease the balance of that
property, and to secure leasing commitment at 35 Graham Street. This will
deliver on our current strategic objectives and provide a stable platform
from which the company can then grow."
The potential redevelopment of 35 Graham Street fits well with Asset Plus's
"value-add" investment strategy. The property has considerable potential for
re-positioning and provides flexibility to respond to a range of occupier
demands under either a light refurbishment option, or a full scale
redevelopment which could physically double the size of the asset. It
continues to represent a unique opportunity within the Auckland office
market.
COVID impact
$0.2 million is the total rental abatement and relief for the half year. The
full year impact is expected to be approximately $0.5 million, partially
offset by the additional income from Eastgate as a result of the deferral of
the settlement to 1 April 2022.
Portfolio update
Stoddard Road continues to be 100% occupied and a dependable asset, though a
level of rental abatement and relief has been granted to ensure tenant
longevity through the prolonged Auckland regional lockdown.
The Taco Bell development was completed at Eastgate during the period, which
has been well received and complements the wider Centre.
Balance Sheet
Debt of $28.3 million was drawn as at 30 September 2021, which represents a
LVR of 15% (March 2021 5.4%).
The undrawn facilities total $101.7 million. It is intended that the proceeds
from the Eastgate divestment will be applied as a debt repayment which will
then provide balance sheet capacity to assist with the proposed refurbishment
or development at 35 Graham Street.
NTA was 44.5 cents per share as at 30 September 2021, which is constant for
the half year. Independent revaluations were not completed during the period
as Directors determined there was no material movement since March 2021.
Dividend
A quarterly dividend has been declared, with the record date set for 7
December 2021 and payment on 14 December 2021. This represents a payout ratio
of 127% for the first half. At the time of the capital raise last year it was
signalled that an element of capital would be required to support the
dividend in the Munroe Lane development window.
The gross dividend for the quarter is 0.519 cents per share. The dividend
consists of 0.45 cents per share of cash, with 0.069 cents per share of
imputation credits attached. The Company will also pay a supplementary
dividend of 0.031 cents per share to non-resident shareholders.
Outlook
The company's key focus remains a successful delivery of the development at
Munroe Lane, leasing the balance of that property and securing leasing
commitment at 35 Graham Street under either development scenario.
Managing the impacts of COVID-19 on the existing portfolio, the effects of
the recent changes in legislation, and ensuring support is provided to those
tenants who need it to ensure that a passive income stream is maintained
moving forward remain key objectives.
Conference call
A conference call will be held today at 10am NZT to discuss the results.
Participants can register for the conference by going to:
https://s1.c-conf.com/diamondpass/10017780-mas9277.html
Footnotes:
(1) Adjusted funds from operations (AFFO) is non-GAAP financial information
and is a common investor metric, calculated based on guidance issued by the
Property Council of Australia. Asset Plus considers that AFFO is a useful
measure for shareholders and management because it assists in assessing the
Company's underlying operating performance. This non-GAAP financial
information does not have a standardised meaning prescribed by GAAP and
therefore may not be comparable to similar financial information prescribed
by other entities. A reconciliation of the net profit after tax to AFFO is
included in the interim results presentation on slide 21 which has been
independently reviewed by the auditors.
(2) Weighted average lease expiry
-ENDS-
For further information please contact:
Bruce Cotterill, Chairman, Asset Plus Limited
+64 21 668 881
Mark Francis
Managing Director, Centuria NZ, manager of Asset Plus Limited
+64 9 300 6161
Simon Woollams
Chief Operating Officer, Centuria NZ, manager of Asset Plus Limited
+64 9 300 6161
End CA:00383712 For:APL Type:HALFYR Time:2021-11-29 08:31:08
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