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Rural Funds Group (ASX:RFF) is a listed real estate investment trust and is managed by Rural Funds Management Limited. It has a portfolio build-up of $687 million of diversified agricultural assets which primarily include almond and macadamia orchards, vineyards, poultry farms, etc. The group has leased the assets to many tenants who are experienced, agricultural operators.
On 1 March 2019, the company announced that the Board of Directors has declared an unfranked dividend of AUD 0.0260750 per share and it will be payable on April 30, 2019 with the ex-date and record date of 28 March 2019 and 29 March 2019, respectively.
Among the key financial and operational highlights, the company reported earnings of 7.73 cents per unit in H1FY19 which is up by 17% as compared to the prior corresponding period. The Adjusted Funds From Operations surged up by 7% to 6.4 cents per unit for the reported period. The distributions per unit stood at 5.22 cents up by 4.0% from the prior corresponding period.
On the operational front, the company reported a consolidated net profit after income tax of $18.4 million for the half year ended 31 December 2018 compared to ~$16.74 million as of 31 December 2017. The consolidated total comprehensive income of the Group for the half year ended 31 December 2018 stood at ~$24.62 million compared to ~$16.74 million as of 31 December 2017. The Group holds investment property, bearer plants and derivatives at fair value.
The financial position of the company reflected net assets of $532.41 million as at 31 December 2018 from $378.73 million at 30 June 2018. At 31 December 2018 the company had total assets of ~$802.78 million compared to $673.80 million in 30 June 2018.
In July 2018, the company conducted an entitlement offer to raise $149.5 million at $1.95 per unit to fund two transactions with JBS Australia Pty Ltd and the acquisition of a cattle property. The entitlement offer provided up to $100.0 million of balance sheet capacity for further acquisitions, based on a target gearing limit of 35%.
The company confirms FY19 forecast Adjusted Funds From Operations of 13.2 cents per unit and distributions of 10.43 cents per unit which is an increase of 4% compared to FY18. The FY20 distribution forecast was also provided by the company, to be 10.85 cents per unit, representing an increase of 4% which is in line with the companyâs DPU growth target.
On the price-performance front, the stock of Rural Funds Group last traded at $2.240 and with a market capitalisation of ~$747.37 million. The stock has generated a YTD return of 1.37% and posted a return of 4.23% over the last six months. It has a 52-week high price of $2.30 and a 52-week low price of $1.945 with an average trading volume of 243,268. Rural fundsâ shares are trading at a PE multiple of 16.80x with an EPS of AUD 0.133. The dividend yield is 4.57%.
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