NPT turns to profit in 2013 on insurance payouts, property valuation gains

NPT, the listed property investor, turned to a profit in 2013 after it gained from payouts on an earthquake damaged Christchurch building and the overall value of its properties rose.

The Auckland-based retail, commercial and industrial property investor reported profit of $33 million in the year ended March 31, from a loss of $2.3 million a year earlier.

The value of NPT’s investment properties rose by $11.3 million to $116.3 million after benefiting from new lease agreements. That is a turnaround from the previous year when values dropped by $36.7 million.

The Department of Internal Affairs signed a three-year lease renewal and AA Insurance signed a new six-year lease at its AA Centre in Auckland, while new leases were signed up for the ground floor of the company’s Eastgate Shopping Centre in Christchurch, which was rebuilt after the 2011 earthquakes.

The new agreements helped the weighted average lease term increase to 5.71 years from 3.4 years.

NPT booked a gain of $32.1 million arising from an insurance claim and sale to the crown of its earthquake damaged property at 195 Hereford Street in Christchurch. It is still in talks with its insurers about a business interruption claim.

The shares rose 5.6 percent to 66.5 cents on the NZX today.

The company’s trading profit fell 62 percent to $3.8 million as rental income dropped 45 percent to $9.1 million after it sold properties in Wellington and Napier, was impacted by the Christchurch earthquake and bank interest income fell 33 percent.

“This is a realistic financial performance for what’s been a challenging period,” chairman John Anderson said in a statement. “We’re confident the trading profit will be restored to a higher maintainable level in the current year.”

The company will pay a dividend of 1.15 cents per share for the final quarter, taking the total for the financial year to 3 cents a share. The directors expect to pay 3.2 cents a share in 2014.

NPT confirmed the appointment of Kerry Hitchcock as managing director after he acted in the role for the past two years. It also moved its head office to Auckland from Wellington, closer to where it sees future growth opportunities.

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