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Goodman Property reports 9pc profit drop

NZN 17/05/2017 Rebecca Howard

NZX-listed property investor Goodman Property Trust has reported a 9 per cent decline in full-year net profit on a deferred tax payment and lower investment property revaluations.

Net profit was $213.8 million in 12 months to March 31, from $233.1 million, a year earlier, the Auckland-based company said in a statement.

A deferred tax payment of $11 million impacted the number. Profit before tax was $220.5 million, including revaluations of $114.7 million, versus $247.9 million and revaluations of $145.8 million in the prior year.

The board will pay a cash distribution per unit of $6.65c per share, unchanged from the prior year.

Looking ahead, however, it said GMT's operating earnings for the 2018 financial year are forecast to be 9.0c per unit before tax.

The reduction from 2017 reflects the impact of asset sales and balance sheet de-leveraging, it said.

Cash distributions will be maintained at 6.65c per unit, it said.

Goodman's investment property was valued at $2.25 billion as of March 31 versus $2.28 billion a year earlier.

As at March 31, the occupancy rate across the portfolio had increased to 98 per cent from 96 per cent in the prior year and the weighted average lease term extended to 5.8 years versus 5.3 years.

It pointed to greater balance sheet capacity with a look through loan to value ratio of 30.6 per cent compared to 33.9 per cent in the previous period and said there was an 8.3 per cent increase in net tangible assets to 130.4c per unit compared to 120.4c per unit at March 31, 2016.

"With significant balance sheet capacity and only partly drawn debt facilities, GMT has the necessary liquidity to fund all its current development objectives. It also ensures that the Trust has sufficient headroom should investor sentiment change and asset values fall," said chief executive John Dakin in a statement.

The units last traded at $1.24 and have fallen 4.6 per cent so far this year.

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