Property For Industry, the listed industrial landlord, nearly doubled its first-half profit on a valuation uplift for its portfolio and said it will tap investors for $49.5 million for acquisitions and developments.
Profit rose to $36.4 million, or 8.85 cents per share, in the six months ended June 30, from $14.4 million, or 3.5 cents, a year earlier, the Auckland-based company said in a statement. Operating revenue was little changed at $32.1 million, with the bulk of the bottom line gain coming from a $25.6 million fair value gain on investment properties.
Property For Industry, which merged with Direct Property Fund to create an $800 million industrial property empire in 2013, said it had secured $86 million in acquisition and development activity. To fund that, the company will tap shareholders for $49.5 million via a one-for-12 rights offer, at $1.44 per share and fully underwritten by Forsyth Barr. The offer represents an 11 cent discount to yesterday’s closing price of $1.55.
“In the current market, securing prime industrial property accretive to shareholder returns continues to be a challenge given the dearth of high quality assets available and the intensity of competition to acquire, particularly from private investors and owner occupiers,” the company said. “Despite this, PFI has successfully completed a number of acquisitions since the start of 2015 which have enhanced earnings and provided PFI with “core” industrial property in key locations.”
The board will pay a second quarter dividend 1.75 cents per share on Sept. 3, with a record date of Aug. 25, taking its first-half dividend to 3.5 cents, in line with the previous corresponding period.
Distributable profit, which adjusts for fair value gains, slipped in the six month period to $15 million, from $15.6 million a year earlier, as operating expenses rose 18 percent to $15.3 million on static revenue.