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Please find attached the presentation document for this morning’s Interim Results conference call. We will work through this presentation as an introduction and then take questions. Please call 5-10 minutes before the start and have the confirmation code to hand.
Clarification regarding time of dial-in:
There was previously an error in the statement of the time zones of the call. Daylight saving is in operation in both New Zealand and Australia.
Date: Thursday 15 November Time: NZDT 10.30am (AEDT 8.30am) – please dial-in 5-10 minutes prior Confirmation Code (required on dial-in): 6561188 Dial-in New Zealand: 0800 450 585 Dial-in Australia: Sydney 8113 1400, Melbourne 8338 0900, Other 1800 554 798 Dial-in UK: 0808 234 8407 Dial-in US: 1866 839 8029 Dial-in other global: email [email protected] for other international dial-in numbers.
For any further information regarding this conference call please email [email protected]
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XRO - Interim Report Release Pack.pdf
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Kiwi Income Property Trust today announced its interim result for the six months ended 30 September 2012, delivering an after tax profit of $26.6 million [Note 1], up from $1.5 million in the prior comparable period. Unit Holders will receive an interim cash distribution of 3.30 cents per unit, in line with previous guidance.
[Note 1] The reported profit has been prepared in accordance with New Zealand generally accepted accounting practice and complies with New Zealand Equivalents to International Financial Reporting Standards. The reported profit information has been extracted from the interim financial statements which have been the subject of a review by Independent Accountants pursuant to New Zealand Institute of Chartered Accountants Review Engagement Standard RS-1. Refer to the table on page 4 for further information.
In another active period for the Trust, over $100 million of bank debt was repaid from insurance proceeds and the sale of Beca House, with the Trust’s bank debt gearing ratio reducing to 32.3% as at 30 September 2012.
Mark Ford, Chairman of the Manager of the Trust said, “In April we sold Beca House in Auckland for $55 million, which was consistent with our strategy of recycling capital out of mature assets to maintain balance sheet flexibility and a strong financial position. The majority of these sale proceeds, together with insurance proceeds received for the PricewaterhouseCoopers Centre (PwC Centre) in Christchurch, have been applied to repay bank debt. Whilst positive from a balance sheet perspective, the absence of rental income from Beca House and the PwC Centre has contributed to a lower operating result.”
Operating profit before tax [Note 2] reduced $6.5 million to $34.7 million and distributable income [Note 2] was $30.2 million, down $5.8 million on the prior comparable period. This was predominantly due to the Beca House sale, an increase in net interest expense, the recognition of a performance fee payable to the Manager and the inclusion of business interruption insurance proceeds in distributable income in the prior comparable period.
[Note 2] Operating profit before tax and distributable income are alternative performance measures used by the Trust to assist investors in assessing the Trust’s underlying operating performance and to determine income available for distribution. Refer to the table on page 4 for full details of how these measures are calculated.
Chris Gudgeon, Chief Executive of the Manager of the Trust said, “At an operational level, active asset management has led to an improvement in occupancy and weighted average lease term across the Trust’s portfolio of shopping centres and office buildings. Good progress has also been made on value-adding and defensive investments including construction of the ASB Bank head office in Wynyard Quarter, Auckland, the redevelopment of Centre Place Shopping Centre, Hamilton and the seismic strengthening project at The Majestic Centre, Wellington.”
Progress against 2013 priorities The Trust has made significant progress on its 2013 priorities, including: - the renewal and extension of $227.5 million of bank debt facilities on favourable terms, increasing the weighted average term to expiry to 4.3 years - the divestment of Beca House for $55 million - solid office leasing activity including the execution of a new 12-year lease to law firm Bell Gully for 6,514 sqm at the Vero Centre and a 10-year lease extension to Unisys for 2,403 sqm at Unisys House - continuing improvements to the quality of the retail experience at LynnMall Shopping Centre, including completion of an expanded and refurbished Farmers department store in October, supported by a new 15-year lease commitment - a new 10-year lease to Kmart at North City Shopping Centre in readiness for a comprehensive store refurbishment to be completed by mid 2013 - substantial progress with the specialty retail re-leasing and re-mixing program at Sylvia Park Shopping Centre, with new retailers and shop fitouts adding to the excitement of the shopping experience at New Zealand’s largest shopping centre - the completion of new premises for Rebel Sport as part of the $39.9 million redevelopment of Centre Place, allowing construction works to commence on the new Farmers department store - on program construction and fitout works for ASB Bank’s new head office with the building making an increasingly impressive architectural statement in its prime waterfront position as it nears completion, and - the commencement of seismic strengthening works at The Majestic Centre, Wellington.
The Trust is also pleased to announce today that agreement has been reached with Hoyts Cinemas for a new 15-year lease over the multi-screen cinema complex at Centre Place [Note 3]. The re-establishment of a compelling main-stream multiplex cinema anchor at Centre Place is an important element in the competitive repositioning of this CBD specialty centre, with a focus on fashion, food and entertainment. The multiplex cinema is to be comprehensively modernised and refurbished at a cost of $7.1 million and is scheduled to open concurrently with the new 7,000 sqm Farmers department store in the fourth quarter of 2013.
[Note 3] The consent of Tainui Corporation Limited, as the freehold owner of the land, has been sought.
Outlook and distribution guidance
Mr Ford said, “The Trust’s outlook is governed by the current moderate pace of economic recovery in New Zealand and we continue to see the need to remain cautious.”
“The repayment of over $100 million of bank debt has been positive from a balance sheet perspective, but the absence of rental income from Beca House and the PwC Centre has contributed to a lower operating result. Given our strong financial position, we are drawing on our distribution reserve to offset this. Subject to a continuation of reasonable economic conditions, we continue to project distributions to Unit Holders for the year ending 31 March 2013 to be approximately 6.60 cents per unit.”
Summary financial results Financial performance For the six months ended 30-Sep-12 [$m] Gross rental income 98.2 Property operating expenditure (30.2) Net rental income 68.0 Net interest expense [Note 4] (25.1) Manager’s fees (6.7) Other expenses (1.5) Operating expenditure (33.3) Operating profit before tax [Note 5] 34.7 Interest rate derivatives [fair value change] (0.2) Property revaluations [fair value change] (1.2) Impairment of investment properties - Insurance proceeds - Other non-operating items (1.3) Profit before tax 32.0 Tax expense (5.4) Profit after tax [Note 6] 26.6
Financial performance for the six months ended 30-Sep-11 [$m] Gross rental income 100.7 Property operating expenditure (28.7) Net rental income 72.0 Net interest expense [Note 4] (23.8) Manager’s fees (5.4) Other expenses (1.6) Operating expenditure (30.8) Operating profit before tax [Note 5] 41.2 Interest rate derivatives [fair value change] (8.8) Property revaluations [fair value change] (65.0) Impairment of investment properties (27.3) Insurance proceeds 71.2 Other non-operating items (0.4) Profit before tax 10.9 Tax expense (9.4) Profit after tax [Note 6] 1.5
Distributable income [Note 5] for the six months ended 30-Sep-12 [$m] Operating profit before tax 34.7 Business interruption insurance proceeds - Non-cash rental adjustments [Note7] 0.3 Distributable income before tax 35.0 Current tax expens [Note8] (4.8) Distributable income after tax 30.2 Transfer from/(to) distribution reserve 2.4 Cash distribution 32.6
Distributions for the six months ended 30-Sep-12 [cpu] Cash distribution 3.30 Imputation credits 0.49 Gross distribution 3.79
Financial position as at 30-Sep-12 [$m] Property assets 2,007 Total assets 2,066 Unit Holder funds 1,073 Bank debt gearing ratio [Note 9] 32.3% Net bank debt gearing ratio [Note 10] 31.3% Net asset backing per unit $1.08
Distributable income [Note 5] for the six months ended 30-Sep-11 [$m] Operating profit before tax 41.2 Business interruption insurance proceeds 2.1 Non-cash rental adjustments [Note 7] 0.5 Distributable income before tax 43.8 Current tax expense [Note 8] (7.8) Distributable income after tax 36.0 Transfer from/(to) distribution reserve (2.0) Cash distribution 34.0
Distributions for the six months ended 30-Sep-11 [cpu] Cash distribution 3.50 Imputation credits 0.65 Gross distribution 4.15
Financial position as at 31-Mar-12 [$m] Property assets 2,009 Total assets 2,160 Unit Holder funds 1,073 Bank debt gearing ratio [Note 9] 35.6% Net bank debt gearing ratio [Note 10] 33.8% Net asset backing per unit $1.09
[Note 4] Shown net of interest income and interest capitalised. [Note 5] Operating profit before tax and distributable income are alternative performance measures used by the Trust to assist investors in assessing the Trust’s underlying operating performance and to determine income available for distribution. [Note 6] The reported profit has been prepared in accordance with New Zealand generally accepted accounting practice and complies with New Zealand Equivalents to International Financial Reporting Standards. The reported profit information has been extracted from the interim financial statements which have been the subject of a review by Independent Accountants pursuant to New Zealand Institute of Chartered Accountants Review Engagement Standard RS-1. [Note 7] Includes rental income resulting from the straight-lining of fixed rental increases and other non-cash rental adjustments. [Note 8] Adjusted to exclude tax payable of $3.4 million for depreciation recovered on the disposal of Beca House. [Note 9] Calculated as bank debt over total assets. [Note 10] Calculated as bank debt less $29.7 million MCN proceeds on deposit (31 March 2012: $58.5 million) over total assets (excluding MCN proceeds on deposit).
Financial performance - Net rental income $68.0m (30-Sep-11: $72.0m) -$4.0m - Like-for-like net rental income $57.1m (30-Sep-11: $57.6m) -$0.5m - Operating profit before tax $34.7m (30-Sep-11: $41.2m) -$6.5m - Profit after income tax $26.6m (30-Sep-11: $1.5m) +$25.1m
The reduction in net rental income of $4.0 million (5.6%) over the prior comparable period was primarily due to the sale of Beca House in July 2012, the closure of 14 shops at Northlands Shopping Centre for seismic strengthening in March this year, as well as reduced rental income at Centre Place Shopping Centre during its redevelopment. Net rental income has also been impacted by increases in insurance costs across the portfolio.
Like-for-like rental income was marginally down (-0.9%), predominantly across the office portfolio as rentals come back into line with market.
The decrease in net rental income, together with a $1.3 million increase in the net interest expense and the recognition of a $1.4 million performance fee payable to the Manager, resulted in a $6.5 million (15.8%) decline in pre-tax operating profit to $34.7 million.
The Trust’s performance over the period exceeded the total return performance fee hurdle of 10% per annum and consequently the Manager earned the performance fee. The Manager will reinvest the performance fee in new units to be issued by the Trust.
After adjusting for property and interest rate derivative revaluations, other non-cash adjustments and income tax, an after tax profit of $26.6 million was recorded, up from $1.5 million in the prior comparable period (when large adjustments were recorded for property devaluations, the impairment of the PwC Centre and insurance proceeds for the loss of the PwC Centre).
Distributable income and distributions to Unit Holders - Distributable income $30.2m (30-Sep-11: $36.0m) -$5.8m - Payout ratio 108% (30-Sep-11: 94%) - Interim cash distribution 3.30 cpu (30-Sep-11: 3.50 cpu)
Distributable income was $30.2 million, down $5.8 million on the prior comparable period. This decrease was largely due to the decline in operating profit before tax, together with the inclusion of $2.1 million of business interruption insurance proceeds from the PwC Centre in the prior comparable period. Unit Holders will receive an interim cash distribution of 3.30 cents per unit, in line with previous guidance.
As previously stated, while the sale of Beca House and settlement of the PwC Centre insurance claim further strengthened the Trust’s financial position, the absence of income from these properties has contributed to a lower operating result and distributable income. The Manager has therefore elected to utilise $2.4 million of the $15.5 million distribution reserve towards payment of the 3.30 cents per unit interim distribution. We expect to require a similar contribution from the distribution reserve for the final distribution payment in June 2013.
The record date for the interim distribution is 29 November 2012, and the payment date is 18 December 2012. The Distribution Reinvestment Plan is operating with the discount set at 2%. This means that eligible Unit Holders may acquire additional units in the Trust at a 2% discount to the average unit price at which the units trade through the New Zealand Stock Exchange during the pricing period.
Financial position - Investment properties $2,006.7m (31-Mar-12: $2,008.9m) -$2.2m - Drawn bank debt $668.0m (31-Mar-12: $769.5m) -$101.5m - Bank debt gearing ratio 32.3% (31-Mar-12: 35.6%) -3.3 percentage points - Net asset backing per unit $1.08 (31-Mar-12: $1.09) -$0.01
As at 30 September 2012 the property portfolio was valued at $2.01 billion, with total assets of $2.07 billion.
The nominal decrease in the investment property value since March 2012 reflects the sale of Beca House offset by capital expenditure incurred, notably in relation to development activity at ASB North Wharf, Centre Place and The Majestic Centre. The sale of Beca House was consistent with the Trust’s strategy of recycling capital out of mature assets to maintain balance sheet flexibility and a strong financial position. Net proceeds from the sale, together with the remaining $63 million of proceeds from the settlement of the PwC Centre insurance claim, were utilised to repay bank debt.
As a result, drawn bank debt at 30 September 2012 was $668.0 million, down from $769.5 million at March 2012. This represents a bank debt to total assets ratio of 32.3%, down from 35.6% at March 2012. After allowing for the additional $29.7 million of Mandatory Convertible Notes funds that remain on deposit, the Trust’s net bank debt gearing ratio has improved to 31.3% from 33.8% at March 2012.
The net tangible asset backing per unit was $1.08 at period end, down marginally from $1.09 at March 2012.
Capital management - Total bank debt facilities $850m (31-Mar-12: $850m) - Weighted average term to maturity of bank debt 4.3 years (31-Mar-12: 3.5 years) - Weighted average cost of bank debt 7.70% (31-Mar-12: 7.02%)
Following the renewal and extension of $227.5 million of bank debt facilities during the period, the weighted average term to maturity of all bank debt facilities has increased to 4.3 years.
Gavin Parker, Chief Financial Officer of the Manager of the Trust said: “Our active approach to capital management over a number of periods has significantly reduced our bank debt expiry risk whilst maintaining a competitive cost. The Trust now has no bank debt expiring until the 2016 financial year.”
Retail portfolio metrics and activity - Portfolio value $1,309.2m (31-Mar-12: $1,298.0m) - Occupancy 97.9% (31-Mar-12: 97.2%) - Weighted average lease term 4.1 years (31-Mar-12: 3.8 years) - 318 rent reviews over 54,000 sqm providing an average uplift of 3.3% - 100 new leases over 23,500 sqm resulting in rental reductions of 2.2% (excluding development deals)
The Manager’s active asset management has ensured that occupancy has been maintained at a healthy level and the retail portfolio’s weighted average lease term has improved. The Manager has also focused on enhancing the retail experience in the Trust’s shopping centres by improving both the quality of retailers and the standard of fitout for specialty shops, mini-majors and department stores, as well as by maintaining high standards in common areas and general customer amenities. Continuous incremental improvements are being made at LynnMall with the latest highlight being the opening of an expanded and refurbished Farmers department store in October, supported by a new 15-year lease commitment. Similarly, a new 10-year lease has recently been executed by Kmart at North City in readiness for a comprehensive store refurbishment to be completed by mid 2013.
A key focus for the period has been the specialty retail lease renewals program at Sylvia Park. The leasing team is capitalising on the opportunity to refresh, remix and introduce new retailers, as well as re-sign some of the centre’s most successful brands. New retailers include Apple retailer Yoobee, Peter Alexander, Novo Shoes, WildPair/Lippy, Decjuba, Rodd & Gunn and Typo, as well as food operators Butlers Chocolate Caf�, Hungry Wok and Tank Juice. During the period, 51 new leases were completed resulting in rental uplift of 6.3% over previous prevailing rents. New leases include 20 new or upgraded shop fitouts and 16 retailers which are new to the centre.
The benefit of the Trust’s retail rent review structure was again exhibited through the period. With over 85% of the portfolio on fixed or CPI-related annual increases, the rental uplift provided through rent review mechanisms absorbed a decline in rentals from new leases generating a net uplift of 1.8% in achieved rentals.
[Note 11] Unaffected sales provides a more ‘normalised’ picture of sales trends. It excludes centres which have undergone redevelopment in either year of comparison (therefore Centre Place) and also excludes Northlands which has experienced significantly increased trading levels since the February 2011 earthquake.
For the 12 months to 30 September 2012, total sales grew 2.3% to $1.4 billion, with four of our six centres recording increases.
Excluding sales from Centre Place and Northlands, overall sales growth for ‘unaffected centres’ was 3.6%, in line with expectations.
Sales at Centre Place fell due to ongoing competitive and redevelopment impacts, while Northlands’ sales experienced a decline following the closure of 14 shops in March to facilitate earthquake strengthening. Despite the closure of these shops, Northlands’ total sales performance is still approximately 16% above pre-earthquake levels.
The average gross occupancy cost ratio for specialty retail tenants has remained stable since March 2012 at 13.4%.
Office portfolio metrics and activity - Portfolio value $517.7m (31-Mar-12: $567.0m) - Occupancy 94.4% (31-Mar-12: 94.7%) - Weighted average lease term 4.2 years (31-Mar-12: 4.1 years) - 10 rent reviews over 10,200 sqm resulting in a 5.3% decline in rental - 16 new leases over 13,000 sqm resulting in a 4.0% decline in rental
Active leasing has ensured that key office portfolio metrics have been maintained. Major lease deals executed during the period include a new 12-year lease for 6,514 sqm with law firm Bell Gully to remain within the Trust’s flagship Auckland office asset, the Vero Centre, and a 10-year renewal by Unisys for 2,403 sqm of office space at Unisys House, Wellington.
The weighted average term of all new deals completed was 9.4 years, increasing the office portfolio weighted average lease term to 4.2 years.
Rentals achieved from rent reviews and new leases over the period have decreased by 4.6% on average over previous prevailing rates, consistent with the portfolio being over-rented by 6.1% as at March 2012.
The occupancy rate across the office portfolio has reduced marginally since March 2012 due to the sale of Beca House, which was 100% occupied. Positive leasing progress resulted in an overall reduction in vacant space on a same-building basis. Net absorption of over 550 sqm was recorded for the balance of the portfolio, all of which occurred in the National Bank Centre which continues to be popular with small business occupiers.
Overall portfolio metrics The portfolio activity outlined above has resulted in improved key metrics for the combined retail and office portfolios as at 30 September 2012. Occupancy has improved from 96.2% at 31 March 2012 to 96.6% and, over the same period, the weighted average lease term increased 0.2 years to 4.1 years.
Developments During the period the Trust continued to progress value-adding and defensive investments as follows:
- ASB North Wharf development Good progress continues to be made on the construction of the new head office building for ASB Bank at Wynyard Quarter on Auckland’s waterfront. The highlight of the period was the installation of the building’s distinctive funnel which forms part of the building’s passive ventilation system.
The focus for the forthcoming period is on leasing the building’s retail component for which good interest has been shown by a range of food and beverage operators.
The project remains on budget and on program to complete in time for ASB’s July 2013 lease commencement date.
- Centre Place Shopping Centre redevelopment The second stage of the $39.9 million redevelopment and repositioning of Centre Place is now well underway. A key milestone was achieved in July, with the opening of a new Rebel Sport store. The relocation of this tenant enabled works to commence on the redevelopment of the former Downtown Plaza complex, which will accommodate the new Farmers department store and a fashion-focused specialty mall, with a target opening date in time for Christmas trading in 2013.
In a key development for the competitive repositioning of the centre, a new 15-year lease over the multi-screen cinema complex has recently been agreed with Hoyts Cinemas [Note 12]. The re-establishment of a compelling mainstream multiplex cinema anchor will complete the fashion, food and entertainment offer in this CBD location.
[Note 12] The consent of Tainui Corporation Limited, as the freehold owner of the land, has been sought.
The multiplex cinema is to be comprehensively modernised and refurbished at a cost of $7.1 million and is scheduled to reopen, with the new 7,000 sqm Farmers department store, in the fourth quarter of 2013. The cinema has been vacant since February 2012 after the expiry of the previous operator’s lease. The commitment from Hoyts, in combination with the new Farmers department store and the recently completed foodcourt and dining lane, is expected to significantly improve specialty leasing prospects and reduce risks in achieving the total centre’s on-completion net rental income target of $11.0 million (pre-amortisation of incentives and leasing fees). The net incremental income yield for the Centre Place redevelopment project, taking into account the additional $7.1 million for the multiplex refurbishment, is expected to be 7.0%-7.5%.
- The Majestic Centre seismic strengthening Council consents for initial structural works have been obtained and, in July, Fletcher Construction commenced seismic strengthening works designed to strengthen the building to a ‘low risk’ category, as defined by the New Zealand Society for Earthquake Engineering (NZSEE). Project completion is currently scheduled for the fourth quarter of 2014.
- Northlands Shopping Centre As a result of the new stricter earthquake loadings standards now applicable in Christchurch, it was announced in March 2012 that 14 shops (out of a total of 126 shops) would close while strengthening work was carried out. Following reconstruction and strengthening work estimated to cost approximately $10 million, current expectations are that 10 shops with a total area of 1,300 sqm will progressively open in the latter half of 2013, restoring approximately $1 million in lost annual income. Minor earthquake strengthening work is continuing to be undertaken at the centre, while engineers continue to evaluate the requirement for potential further strengthening or rebuilding works. These evaluations are also needed to facilitate the settlement of material damage insurance claims arising from the earthquake events. It is anticipated that some earthquake strengthening work may be undertaken in conjunction with a partial redevelopment of the centre to improve the retail offer and to take advantage of the potential opportunity to construct a new, enlarged Farmers department store.
Portfolio seismic strengthening As previously reported, the Manager has been pro-active in completing a seismic review of the Trust’s property portfolio. The latest assessment indicates that approximately 5% of the Trust’s portfolio, by reinstatement value, is ‘earthquake prone’; defined by NZSEE as being less than 34% of New Building Standard (NBS). A further 15% is currently assessed as being above 34% of NBS but below 50% of NBS.
The Manager’s objective is to complete strengthening for all sub-50% of NBS buildings within the next five years, with strengthening to earthquake prone buildings completed as a priority in the next two years. The estimated cost to complete these works is approximately $30 million, in line with previous guidance given to investors. Actual costs remain dependent upon a number of factors including the completion of engineering assessments (and peer reviews where appropriate), the comprehensive assessment of remedial/strengthening solutions and agreement with the Trust’s insurer on the extent to which the Trust’s material damage insurance will contribute to strengthening work carried out as part of rebuilding works at Northlands.
Asia Pacific Real Estate Association (APREA) 2012 Best Practices Awards In September, the Trust was again recognised by APREA in its Best Practices Awards. The Trust received three awards, recognising market-leading practices in portfolio reporting and corporate governance, and was also awarded the best submission from New Zealand.
For further information please contact: Chris Gudgeon Chief Executive Kiwi Income Properties Limited DDI: +64 9 359 4011 Mob: +64 21 855 907
Mathew Chandler Investor Relations and Corporate Affairs Manager Colonial First State Global Asset Management DDI: +61 2 9303 3484 Mob: +61 407 009 687
Further information provided to the NZX includes: 1. NZX Appendix 1 2. NZX Appendix 7 3. Interim Report 4. Interim Result Presentation
About Kiwi Income Property Trust
Kiwi Income Property Trust’s objective is to optimise returns for its Unit Holders through the careful acquisition, development and professional management of its property portfolio. The Trust is listed on the New Zealand Stock Exchange and is ranked within the top 15 on the NZX 50 Index, and is a member of the NZX 15 Index.
The total value of the Trust’s property portfolio is $2.01 billion. Assets include:
Key Retail Assets Sylvia Park Shopping Centre Auckland LynnMall Shopping Centre Auckland Centre Place Shopping Centre Hamilton The Plaza Shopping Centre Palmerston North North City Shopping Centre Porirua Northlands Shopping Centre Christchurch
Key Office Assets Vero Centre Auckland National Bank Centre Auckland The Majestic Centre Wellington Unisys House Wellington 44 The Terrace Wellington
Kiwi Income Property Trust’s website address is kipt.co.nz
Comvita’s net profit after tax (NPAT) for the first six months to 30 September 2012 was $2.386 million on sales of $45.4 million. This compares to $2.578* million NPAT on sales of $41.8 million for the same period last year.
A fully-imputed interim dividend of 4 cents per share in respect of the first half year will be paid on 21 December 2012 for those registered on 14 December 2012. The dividend reinvestment plan will not apply.
Chairman Neil Craig said, “Comvita historically has a year of two halves with the second half year sales and profits significantly stronger than the first half. We expect this to be the case again this financial year as Asian sales continue to grow strongly. We remain confident that the company will deliver an increase in earnings for the full year. NPAT for the full year ending March 2012 was $8.224 million on sales of $95.9 million.”
"This is a solid result when considering that the first six months is our quieter period and sales and earnings growth were constrained by raw honey supply. The growth of our business year to date in our key Asian markets is especially pleasing and this will be fully reflected over the coming months as we enter the peak season in these Northern Hemisphere countries."
Woundcare innovation continues to provide returns The US$1 million Medihoney™ milestone payment from Derma Sciences (NASDAQ: DSCI), our specialist wound care partner, announced last week, is a capital payment and not included immediately in our operating profit. However, it is an indicator of how well medical sales are tracking, for which Comvita continues to receive royalty payments.
Continued sales growth in Asia Trading activity has been especially strong in China, South Korea and Hong Kong. Comvita CEO, Brett Hewlett said, "In Asia, where Comvita operates a predominantly direct-to-consumer retail business, we are much better equipped to take advantage of the continued growth in consumer demand for our unique, premium product offering.
In some of the non-Asian markets, such as Australia and the UK, where Comvita sells through third party retail chains, the trading environment has been relatively tough. The general downturn in the economy and consumer confidence in these markets in particular, is resulting in an increasingly competitive environment for our retailer customers."
Raw material supply sustainability "The other factor that has been a constraint on sales growth and margins during this first half year is the short supply of our key ingredient, Manuka honey. The honey crop from last summer was well below average, due to generally inclement weather during the summer of 2011/2012, resulting in a sharp increase in the purchase price for new season honey.”
“Dealing with this constrained supply of Manuka honey resulted in priority allocation of available product across markets. The benefit of this targeted allocation of sales for our Manuka honey will have significant benefit during the second half year as we enter the Northern Hemisphere winter and the Christmas and Chinese New Year festive seasons."
We have continued to grow our volumes of Manuka honey under direct ownership with the objective of securing a greater proportion of our long term supply requirements, and at the same time mitigating for sharp changes in price from year to year. An increase in security of supply of this raw material is a key strategic initiative for Comvita.
In October, we acquired a Whanganui-based bee-keeping operation. The Group now operates four apiary businesses across the North Island of New Zealand, which contribute approximately one-third of Comvita's total Manuka honey requirements. The balance of supply comes from contracted supply with beekeepers. Four years ago, 100% of supply came from third party sources.
Comvita fresh Olive Leaf Extract assists in slowing the onset of type II diabetes In September, Comvita announced results of a clinical trial conducted by The Liggins Institute at The University of Auckland, on its fresh Olive Leaf Extract which indicated the potential to slow the onset of type II diabetes.
Mr. Hewlett said, "The results of this trial are significant and have already led to a new health claim and the launch of a new product range in Australia, New Zealand and Hong Kong. Consumers traditionally use our fresh Olive Leaf Extract to relieve symptoms of colds and flu and support their immune system. The clinical evidence that supports the use of Comvita’s fresh Olive Leaf Extract to manage blood sugar levels provides a reason for a much larger group of consumers to use the product all year round."
“Comvita has demonstrated that even in a year with short supply of Manuka honey, we can still drive value for the business. We are well placed to take advantage of the Company’s strong premium brand in key Asian markets.”
“In June of this year we passed the milestone of $100 million in annualised sales and we remain confident that both top line and bottom line growth can be achieved for this fiscal year and beyond.”
* Restated from 2.212 million, refer to the Interim Financial Statements, note 18 for further details. # Ends #
Background information About Comvita (www.comvita.co.nz) Comvita is an international natural health and beauty products company with a strong New Zealand heritage. We are committed to the development of innovative natural health and wellbeing products, backed by credible scientific research. We develop and manufacture products in the categories of Health Care, Personal Care, Wound Care and Health Foods. Manuka (leptospermum) honey is at the core of the Comvita product range and we are the largest manufacturer and marketer of this uniquely New Zealand resource. We sell into more than 18 countries through a network of wholesale and third-party outlets, more than 470 branded retail outlets throughout Asia – including 400 stores in 40 cities in mainland China and online. We have offices in New Zealand, Australia, Hong Kong, Japan, Taiwan, South Korea and the United Kingdom.
Comvita Limited Results for Announcement to the Market
Reporting Period 6 months to 30 September 2012 Previous Reporting Period 6 months to 30 September 2011
This report, including the results for the previous reported half year, is consistent with the unaudited interim financial statements of Comvita Limited for the six months ended 30 September 2012.
Consolidated Results 1. Results $NZ 000
Revenue from ordinary activities Current half year $45,434 Up 8.7% Previous reported half year $41,798
Profit from ordinary activities after tax attributable to security holder Current half year $2,386 Down 7.4% Previous reported half year $2,578 *
Net profit attributable to security holders Current half year $2,386 Down 7.4% Previous reported half year $2,578 *
* Restated from $2.212 million, refer to the Interim Financial Statements, note 18 for further details
2. Net Tangible Assets per Security As at 30 September 2012 $1.21 As at 30 September 2011 $0.99
FISHER & PAYKEL HEALTHCARE REPORTS HALF YEAR PROFIT UP 18% Auckland, New Zealand, 22 November 2012 - Fisher & Paykel Healthcare Corporation Limited (NZSX:FPH, ASX:FPH) today reported net profit after tax of NZ$33.3 million for the six months ended 30 September 2012, an increase of 18% compared to the first half last year.
In constant currency terms, the company’s operating profit grew 46%, primarily as a result of revenue growth, improved gross margins and operating efficiencies.
Operating revenue Operating revenue was a record NZ$266.9 million, which was 6% above the same period last year, or 8% growth in constant currency terms.
The company’s respiratory and acute care (RAC) product group operating revenue increased by 11% and obstructive sleep apnea (OSA) product group revenue increased by 3% in constant currency terms.
“Strong growth in our RAC product group was driven by ongoing growth in acceptance of our respiratory humidification systems which assist to improve patient care in a wide range of applications, including invasive ventilation, non-invasive ventilation, oxygen therapy and humidity therapy”, commented Fisher & Paykel Healthcare’s CEO, Mr Michael Daniell. “Growth in revenue from new applications beyond invasive ventilation was particularly encouraging, with consumables revenue from those increasing 20% in constant currency.
“In our OSA product group, revenue for our mask range grew 5% in constant currency terms, reflecting a ramp-up in growth during the half following the introduction of our new Pilairo nasal pillows and Eson nasal masks. Customer response to both masks has been very positive, with constant currency mask revenue growth of 11% in the second quarter. Revenue for our ICON flow generator range grew 5% in constant currency over the first half last year, offset by the expected decline in revenue from our legacy SleepStyle range.”
Dividend The company’s directors have approved an interim dividend for the financial year ending 31 March 2013 of 5.4 NZ cents per ordinary share (2012: 5.4 cents), carrying full imputation. For New Zealand resident shareholders that equates to a gross dividend of 7.5 cents per ordinary share. Eligible non-resident shareholders will receive a supplementary dividend of 0.953 NZ cents per ordinary share. The interim dividend will be paid on 14 December 2012, with a record date of 30 November 2012 and ex-dividend dates of 26 November 2012 for the ASX and 28 November 2012 for the NZSX.
The company offers a dividend reinvestment plan (DRP), under which eligible shareholders may elect to reinvest all or part of their cash dividends in additional shares. A 3% discount will be applied when determining the price per share of shares issued under the DRP and will be applied in respect of the 2013 interim dividend and future dividends, until such time as the directors determine otherwise.
Research & Development, Selling, General & Administrative expenses Research and development (R&D) expenses increased by 7% over the prior comparable period to NZ$21.3 million, representing 8% of operating revenue.
The company continued to expand its product and process research and development activities, and current new product projects include OSA masks, flow generators, humidifier systems and respiratory and acute care consumables.
Selling, general and administrative (SG&A) expenses increased 6% to NZ$77.0 million, or 7% in constant currency terms, as the company continued to expand its operations and its sales teams in the North America, Europe and Asia-Pacific regions. In September we acquired selected assets from our distributor in South Korea and established our own sales operation.
Capacity Expansion During the half year, the company invested NZ$40.9 million in capital expenditure, which included equipment for increased manufacturing capacity, new product tooling, replacement equipment and NZ$27.4 million for construction of the third building on its Auckland site.
The increase in manufacturing of consumable products at the company’s facility in Tijuana, Mexico continued, with an increasing quantity and range of the company’s products now manufactured there.
Foreign Exchange Hedging To protect the company from exchange rate volatility, the company had in place at 30 September 2012 a mix of foreign exchange contracts and collar options, up to five years forward, with a face value of approximately NZ$450 million. These instruments hedge the company’s net exposure. At 30 September 2012, the company had in place for the second half of the 2013 financial year approximately 95% cover for the US dollar and approximately 89% cover for the Euro, at average rates of approximately 0.76 US dollars and 0.49 Euros to the New Zealand dollar.
Outlook for FY2013 “We expect constant currency revenue growth to increase further in the second half, as new products and applications continue to gain traction.
For the 2013 financial year, assuming current exchange rates for the remainder of the year, we expect our operating revenue to be in the range of NZ$545 million to NZ$555 million and net profit after tax to be in the range of NZ$69 million to NZ$72 million. That represents a three to four million dollar improvement on the guidance we provided at our Annual Shareholders’ meeting in August”, concluded Mr Daniell.
Financial Statements and Commentary Attached to this news release are condensed NZ dollar financial statements and commentary. For convenience the income statement has been translated into US dollars. The US dollar financial statement is non-conforming financial information, as defined by the NZ Financial Markets Authority.
The company’s financial statements for the six months ended 30 September 2012 and the comparative financial information for the six months ended 30 September 2011 have been prepared under the New Zealand equivalents to International Financial Reporting Standards (NZ IFRS).
A constant currency analysis is also included. A constant currency income statement is prepared each month to enable the board and management to monitor and assess the company’s underlying financial performance without any distortion from changes in foreign exchange rates. The constant currency data provided is an estimate of the changes in the main income statement items after excluding the impact of movements in foreign exchange rates, hedging results and balance sheet translations. The data is based on the NZ dollar income statements for the relevant periods which have all been restated at the budget foreign exchange rates for the 2013 financial year.
The constant currency analysis is non-conforming financial information, as defined by the NZ Financial Markets Authority, and has been provided to assist users of financial information to better understand and track the company’s financial performance without the impacts of spot foreign currency fluctuations and hedging results.
Half Year Results Conference Call Fisher & Paykel Healthcare will host a conference call today to review these results and to discuss the outlook for the remainder of the 2013 financial year. The conference call is scheduled to begin at 10:00am NZDT, 8:00am AEDT (4:00pm USEST) and will be broadcast simultaneously over the Internet.
To listen to the webcast, access the company’s website at http://www.fphcare.com. Please allow extra time prior to the webcast to visit the site and download the streaming media software if required. An online archive of the event will be available approximately two hours after the webcast and will remain on the site for two weeks.
To attend the conference call, participants will need to dial in to one of the numbers below at least 5 minutes prior to the scheduled call time and identify yourself to the operator. When prompted, please quote the conference code of: 76732439.
New Zealand Toll Free 0800 452 569 USA Toll Free 1866 242 1388 Australia Toll Free 1800 354 715 Hong Kong Toll Free 800 968831 United Kingdom Toll Free 0808 234 7860 International +61 2 8823 6760
An audio replay of the conference call will be available approximately 2 hours after the call and will be accessible for two weeks by dialing one of the numbers below. When prompted please enter the conference code of: 76732439.
New Zealand Toll Free 0800 445 136 USA Toll Free 1866 214 5335 Australia Toll Free 1800 766 700 Hong Kong Toll Free 800 901596 United Kingdom Toll Free 0800 731 7846 International +61 2 8235 5000
About Fisher & Paykel Healthcare Fisher & Paykel Healthcare is a leading designer, manufacturer and marketer of products and systems for use in respiratory care, acute care and the treatment of obstructive sleep apnea. The company’s products are sold in over 120 countries worldwide. For more information about the company, visit our website http://www.fphcare.com.
Contact: Michael Daniell MD/CEO on +64 9 574 0161 or Tony Barclay CFO on +64 9 574 0119.
FPH - 2012 Half year up 18%.pdf
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HALFYR: BFW: Burger Fuel Worldwide Ltd Preliminary Half Year Result
BFW 20/11/2012 09:20 HALFYR
REL: 0920 HRS Burger Fuel Worldwide Limited
HALFYR: BFW: Burger Fuel Worldwide Ltd Preliminary Half Year Result
Burger Fuel Worldwide Limited Results for announcement to the market
Reporting Period: 6 Months to 30 September 2012 Previous Half-year Reporting Period: 6 Months to 30 September 2011
Amount (000's) Percentage change Revenue from ordinary activities: 5,364 10.1% Profit (loss) from ordinary activities after tax attributable to security holders: 308 37% Net profit (loss) attributable to security holder: 308 37%
Interim/Final Dividend Amount per security Imputed amount per security
Record Date - Dividend Payment Date -
Comments:See attached Directors commentary and following
To be followed by the balance of the information required in the report pursuant to Appendix 1.
The directors of Burger Fuel Worldwide Limited (BFW) are pleased to report that the unaudited net profit before tax (NPBT) is up 102% to $454,356 for the six months to 30 September 2012.
This compares with a NPBT of $224,554 for the same period last year.
Prior year tax losses in NZ have now been fully utilised and in FY13 it is necessary to carry a tax provision. The Group reported a net profit after tax (NPAT) of $308,372 to 30 September 2012.
Total unaudited BurgerFuel Worldwide system sales are $22,056,829 (excl GST) up 26.5% on the same period last year.
BFW RESULTS (UNAUDITED) FOR THE PERIOD 1 APRIL TO 30 SEPTEMBER 2012 30 Sept 2012 30 Sept 2011 $000 $000 Operating Revenue 5,364 4,870
Operating Expenses (4,910) (4,645)
NPBT 454 225 NPAT 308 225
Total operating revenue is up by 10.1% from $4,869,700 to $5,363,877.
This takes into account the reduction in the company's revenue of $524,662 as a result of the sale of the Australian company owned store to a franchisee.
The focus in FY13 has been on international expansion in the Middle East as well as the continued re-shaping of the New Zealand business. This better serves the overseas operations, as well as New Zealand.
Dubai has opened a new store in The Mall of the Emirates, the third largest shopping mall in the Middle East. More stores are currently under construction in Dubai and Saudi Arabia and they will open in this financial year. Egypt is also anticipated to open its first store toward the end of March 2013.
In New Zealand system sales remain strong and are up 5.8% with two new stores and one relocated.
New Zealand continues to grow with a further two stores opening after 30 September 2012.
In Australia, we continue to operate one store under franchise and at this stage there are no further stores planned there. The board will however continue to monitor and reassess this position.
Results for this period demonstrate a determined focus to grow company profits, whilst at the same time balancing out the need for further investment into our international expansion.
As at 30 September 2012 the group had $2,310,829 in cash, up $1,151,462 (99.3%) on the prior period and has no borrowings.
Whilst we are always mindful of returning profits to shareholders by way of dividends, it is essential at this time that we continue investment to support growth and take a long-term view of our business.
On behalf of the board of directors of Burger Fuel Worldwide Limited, I would like to thank all of our shareholders for their ongoing support.
Peter Brook Chairman
CEO Report - First Half of 2012
From 1 April to 30 September our New Zealand business has enjoyed an unaudited system sales increase of 5.8%.
The Hamilton region store locations were reviewed with the subsequent closure of our central city site and the opening of a new site at The Base shopping centre in the burgeoning northern suburbs.
Manukau was relocated to a preferred site and accordingly has increased its turnover. BurgerFuel has also opened a new store in Cuba Street, Wellington.
More recently (subsequent to 30 September 2012) we opened two new stores in Pukekohe and Silverdale. There are now 30 BurgerFuel outlets in NZ with more scheduled to open in the second half of this financial year.
Our newer sites feature our latest store designs that we intend to roll out to existing sites in the coming months. The dining-areas have more seating, appealing to a broader audience and bringing alive our "eco-licious" and cutting edge position in the market.
Kids Meals were introduced in this period and we also launched Radio BurgerFuel, which is now streaming live to all our stores in New Zealand and Australia. It's also available for public listening at www.radioburgerfuel.com.
The NZ business was successfully restructured in April to enable continued growth here in our home market. We are actively recruiting new franchisees for the main centres in the South Island and regional centres in the North Island. In Auckland and Wellington our existing franchisees are looking to open more stores and this is, in our view, a great endorsement of the strength of our brand and business model.
Unaudited sales are up 6.1% for the 1 April to 30 September period. Our company owned store was sold to a franchisee in August 2011, hence our Australian sales revenue is down on the prior period. We continue to have one franchised site in Sydney and Australia remains a large potential market for us in the future.
BurgerFuel Middle East unaudited sales for the 1 April to 30 September period are up 141% showing the importance of maintaining a presence in this region. Many of the Middle Eastern stores have broken sales records this year during the Eid festival (that marks the end of Ramadan).
In a shining endorsement of the strength of our brand and business model, our existing Master Licensee in Dubai has acquired the Kuwait territory and also entered into a joint venture with the Abu Dhabi based Bin Hammoodah Group to open in the UAE city of Abu Dhabi in the near future. A new site has been opened in Dubai's Mall of Emirates and more sites are planned to open in Dubai before the end of the financial year.
We have shipped a full restaurant fit-out to our new Egypt licensee and look forward to Cairo being added to the list of world cities we operate in.
All our existing sites in Saudi Arabia are in its Eastern Province and within the next few weeks we will be opening in Riyadh, the capital of Saudi Arabia with a population of 5.3 million.
BurgerFuel is performing strongly in every market that it operates in. Worldwide system sales (unaudited) have increased to $22.1million, up 26.5% on the same period last year.
BurgerFuel's operating revenue is up 10.1% to $5,363,877. Profitability continues to improve for our franchisees and for Burger Fuel Worldwide Ltd despite the fact we are continuing to invest for further growth.
We now have a variety of operating models that can be deployed in varying market places to deliver the BurgerFuel experience that our customers value.
Our brand has broader appeal than it did a year ago, serving a wider demographic of customers. We will continue with measured investment to Engineer The Ultimate Burger in more locations throughout New Zealand and overseas.
We continue to demonstrate BurgerFuel's scalability as well as its credibility in becoming an international brand in its own right. Onwards and upwards as we continue the trend of more stores and more of New Zealand's proudly exported, great tasting burgers.
Josef Roberts Chief Executive Officer BurgerFuel Worldwide End CA:00229963 For:BFW Type:HALFYR Time:2012-11-20 09:20:40
Reporting Period 6 months to 30 September 2012 Previous Reporting Period 6 months to 30 September 2011
The financial statements attached to this report have been reviewed by PricewaterhouseCoopers and are not subject to a qualification. A copy of the Accountants’ Report applicable to the interim financial statements is attached to this announcement.
Current period NZ$000, Up/(Down) %, Previous corresponding Period NZ$000 Total net income/(loss) from ordinary activities 13,343 N/A, (1,070) Profit/(loss) from ordinary activities after tax attributable to security holder 11,478 N/A, (2,032) Net profit/(loss) attributable to security holders 11,478 N/A, (2,032)
Dividend As previously announced on 21 November 2012, Kingfish will pay a partially imputed quarterly dividend of 2.29cps as part of its long term distribution policy.
Ex-Dividend Date 5 December 2012 Record Date 7 December 2012 Dividend Payment Date 21 December 2012
NAV per share 30 September 2012: $1.15
For immediate release:
29 November 2012
Kingfish delivers another strong performance
Total shareholder return increased 18.1% for the six month period Discount between share price and NAV narrowed from 16.0% to 8.6% 4.42 cents per share of dividends paid Total of 16.9 million warrants exercised over two-year life
NZX-listed investment company Kingfish Limited (NZX: KFL) today announced a net operating profit for the six month period ended 30 September 2012 of $11.5 million.
In the six months to 30 September 2012, Kingfish’s adjusted net asset value (NAV)* increased by 7.9% despite being negatively impacted by the dilutionary effect of the warrants exercised in the period at 95c each. 14.0 million warrants were converted into ordinary shares during the six months, and a total of 16.9 million have been exercised over the two-year life of the warrants.
Excluding the dilutionary effect of the warrants, Kingfish’s adjusted NAV* increased by 10.4% for the six months, ahead of the NZX50 Gross Index which rose 9.2% over the same period. Since inception (2004), Kingfish’s adjusted NAV* is up 74.4%, significantly ahead of the NZX50 Gross Index which is up 47.9%.
The share price traded between $0.93 and $1.06 during the period, closing at $1.05 on 30 September 2012. Since then, the share price has continued to strengthen, closing at $1.10 on 28 November 2012. Total shareholder return increased 18.1% in the six months, and is up 69.1% since inception.
In accordance with Kingfish’s dividend policy (2% of average NAV per quarter), the company paid 4.42 cents per share in dividends during the six months. On 21 November 2012 the Board declared a dividend of 2.29 cents per share to be paid to shareholders on 21 December 2012.
The discount between Kingfish’s share price and its NAV at 30 September 2012 was 8.6%, which has narrowed considerably over the six months from 16.0% at the start of the period. Kingfish Chairman, Alistair Ryan commented: “We are encouraged to see a strong total shareholder return for the period which was the result of a robust portfolio performance.”
Kingfish Manager, Fisher Funds, said: “The New Zealand share market has had a period of strong performance. Due to the slow-moving economy, this performance has been driven more by an increase in equity prices than by any uplift in expected earnings growth.”
During the period, Kingfish reduced its holding in Metlifecare, Acurity Health (formerly Wakefield Health) and Pumpkin Patch while increasing its holding in Trade Me, Freightways and Summerset. Cash as at the end of September was high ($21.2m) due to the exercise of warrants ($11.6m) in early September.
The fundamentals of the Kingfish portfolio are positive relative to the broader market. According to the consensus of analysts’ forecasts, the earnings of Kingfish’s investments are expected to grow by 18% in the coming year with shares trading around 14.8 times earnings.
Mr Ryan said: “It is pleasing to note that the positive performance of the Kingfish portfolio has continued during the first half of this financial year.”
Alistair Ryan Chairman Kingfish Limited Tel: (09) 489 7094
*Total Shareholder Return and adjusted NAV assume all dividends are reinvested, but exclude imputation credits
Kingfish Limited is a listed investment company that invests in New Zealand companies. The investment portfolio of Kingfish is managed by Fisher Funds Management Limited, a specialist fund manager with a track record of successful investing. Kingfish aims to offer investors competitive returns and access to a diversified portfolio of investments through a single, tax efficient investment vehicle. Kingfish may invest in companies listed on the NZX, NZAX and unlisted companies. The company listed on the New Zealand Exchange in March 2004. /ends