Industria REIT Reported 5.75% Growth in NPAT for Half-year ended 31 December 2018

IDR

Industria REIT (ASX: IDR) today on 19 February 2019 has announced its results for the period 31 December 2018. As reported, the net profit for the six months ending 31 December 2018 for the company was $14.6 million, up $0.8 million on the prior corresponding period (pcp). The growth was driven by contracted fixed uplifts across the portfolio, leasing, and two new acquisitions at 1 West Park Drive, Derrimut and 13 Ricky Way, Epping.  

The fund flow from operations increased $0.5 million to $15.3 million, or 3.3% on a per security basis to 9.4 cents. The company maintained guidance of 19.05 – 19.25 cents per security for FY19.  The net tangible assets (NTA) of Industria increased $0.7 million, with valuation gains of $3.1 million partially offset by stamp duty costs related to the acquisitions and derivative fair value movements.

The active management of the company has driven revenue growth while lowering the risk profile, with less than 10% of the portfolio expiring in the next eighteen months, which is very satisfying as per the Fund Manager of APN Industria REIT Alex Abell. The company also demonstrated discipline when deploying capital, investing in two assets that deliver attractive initial yields averaging 7.1% without taking on excess risk, as stated by Alex.

The balance sheet is in a strong position with a relatively moderate gearing ratio of 33.3%, which is at the lower end of the target of 30 – 40% gearing band. Refinancing risks remain low as the debt maturities are staggered across four financial years, with the nearest debt maturity in FY20 limited to ~$46 million. The weighted average debt maturity was 2.8 years, and the average interest rate is 3.6%, which is one of the lowest in the sector.  Property Portfolio occupancy increased to 96% after the 6,600 square metres of leasing. Approximately 2,900 square metres of vacancy was leased, and a further 3,700 square metres of renewals agree.

Portfolio occupancy increased to 96% after 6,600 square metres of leasing. Approximately 2,900 square metres of vacancy was leased, and a further 3,700 square metres of renewals agreed. Leasing transactions with existing tenants seeking expansion space exceeded 1,600 square metres.

On the price-performance front, the stock of Industria REIT last traded at $2.890 with a decrease of 1.701% during the day’s trade and with a market capitalisation of $478.75 million. The stock has generated a YTD return of 8.09% and posted returns of 10.11%, 10.94% and 8.49% over the last six months, three months and one-month period respectively. It has a 52-week high price of $2.970 and a 52-week low price of $2.450 with an average trading volume of 76,268 million. The stock is trading at a PE multiple of 9.950x with an EPS of AUD 0.296 and with an annual dividend yield of 5.71%.


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