Aventus Retail Property Fund Indicates For Green Signal On Internalisation Proposal

On September 25, 2018, Aventus Retail Property Fund (ASX: AVN) announced about the Internalisation Proposal that has been approved, as per the latest resolutions in relation to the Proposal that have been given a green signal by requisite majority. Particularly, about 72 percent of votes were casted in agreement with the resolutions and supported the Internalisation Proposal. This was as per the voting on the resolution through a meeting that was planned for 25 September 2018. With this, ASX trading in existing AVN Units will be done on September 26, 2018 as the last trading day while trading of AVN stapled securities will commence on a deferred settlement basis from September 27, 2018 with last date for deferred settlement trading as October 01, 2018. The group’s stapled securities will start normal trading from October 02, 2018.

It has been a month now that the group indicated the market on the internationalization of the Fund’s management function. This move was made to eradicate any link to external performance and management fees. The group undertook this move to improve competitiveness for acquisition and streamline many strategic developments. The group also stated that the internalisation will add to additional income streams based on third party management funds along with asset management. With this, an accretion of 1.1% in Funds from Operations (FFO) for FY19 with 4% accretion in Adjusted funds from operations (AFFO) was indicated; while the Net tangible asset per share is expected to go down from $ 2.38 to $ 2.10. 

Lately, the group had indicated about cancellation of dividend announcement made on September 21, 2018 as ASX advised the group that September 2018 Distribution has to be managed offline and not online. The group had otherwise declared a distribution amount of 4.09 cents per unit for the quarter ending September 30, 2018 with the record date as September 28, 2018 and the payment date as November 23, 2018. Thus, while the terms, amount and dates for the distribution have been retained, the group had to cancel its on-line distribution form. The main reason cited was for ASX systems not able to support the same owing to overlap with the internalisation date.

This has followed the yearly performance wherein Aventus Retail Property Fund reported Net Profit After Tax of  $135.6 million for the year ended June 30, 2018, representing a decrease of 14.66 per cent. Revenue from ordinary activities were up 26% to $164.6 million over last year. Basic and Diluted Earnings per share were 27.5 cents against 39.2 cents of last year. The group reported net operating cash flow of $88.3 million compared to $72.6 million of last year. Nonetheless, the group declared a final dividend of 8.14 cents, which led the full year dividend to 16.28 cents. This has been up from the figure of 15.88 cents of last year.

The stock of the real estate entity stood at $ 2.200, as at September 25, 2018 (3:50 PM AEST).

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