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Opus International Consultants (Opus) reported a much improved second half performance for 2016 despite continuing difficult economic conditions in Canada and Australia, with Operating EBIT up from $2.5m in the first half to $17.7m for the full year.
The New Zealand business underpinned the Group performance with a record Operating EBIT up 47.6% on the first half and a full year Operating EBIT of $36.9m.
“Group revenue was $470.9m, down on prior year by 6.8% which was largely due to the Canadian geomatics business Opus Stewart Weir, which was hard hit by low oil prices and the resulting collapse in oil industry project work,” said Opus Chairman Kerry McDonald.
“However, early measures were taken to reduce costs and balance short term profitability with long term sustainability. As a result, Opus Stewart Weir went from a $5.1m trading loss in the first half to a profitable second half of $2m, excluding $4m in restructuring costs and property lease provisions.
“In Australia, we continued to trade at a loss. During the year we closed five of our offices, leaving a network much more sharply tailored to current conditions, with restructuring costs of $1.1m.
“Given the difficult business environments with the decline in oil and gas prices and resource prices generally we reassessed the value of our operations and impaired the carrying value of Australian assets by $4.4m and Canadian assets by $33.2m,” said Mr McDonald.
Chief Executive Dr Prentice said business improvement activities around costs and clients remained a high priority, as the business transitions to its new strategy.
“Our new global strategy focuses on enhancing capability in proven areas of expertise, and better collaboration across the key global growth sectors of transportation, buildings, and water.
“We are increasing the effectiveness of our excellent talent and providing clients with integrated engineering and wider solutions, regardless of where they are located. Our business structure has been realigned and enhanced with the appointment of new leaders to drive sustainable global growth and strengthen client delivery across all of our operations.
“Our UK business was named Company of the Year by New Civil Engineer (NCE) at the NCE100 awards. The business generated $62.1m revenue and $2.2m in Operating EBIT, a 6% decrease in Operating EBIT in local currency, reflecting the weakness in the GBP following the Brexit vote,” added Dr David Prentice.
Operating net cash of $14.4m supported a fully imputed final dividend of 2 cents, taking the full year dividend to 4 cents.
For further information please contact:
Opus International Consultants Matthew O’Driscoll –Senior Communications Advisor T: +64 27 44 77 250 E: [email protected]
Half Year Results to 31 Dec 2016 and Interim Dividend 8:30am, 8 Feb 2017 | HALFYR FLIWAY GROUP LIMITED
Financial Results for the six months ended 31 December 2016 (Unaudited)
OVERVIEW - BUSINESS DEVELOPMENT SUCCESS
Stronger performance from the Business Development teams in both the Domestic and International divisions meant revenue for 1H17 was down year on year by only 1.4% despite the customer loss announced in June 2016. The December month's revenue was 5% ahead of last year as the new customer wins and existing customer uptrades delivered a strong revenue finish to the first half of FY17. Further customer contract wins with commencement dates in 2017 have seen us secure additional capacity in both Transport and Warehousing.
Fliway Group performance was impacted by the customer loss. As indicated at the time, it was expected the EBITDA impact could appropximate 10% of Fliway's historical EBITDA performance and this has been reflected in the 1H17 results. Issues additionally impacting the business have been capacity constraints in the Transport business unit as a result of internal linehaul equipment availablility and the Kaikoura earthquake, which transferred significant rail freight volumes onto road, thereby consuming capacity overflow options over a peak trading period. Customer volumes, particularly in the second quarter, exceeded the network capacity in Transport.
Additional work was gained through the wider relationship with UPS and a number of initiatives were undertaken in the UPS-Fliway joint venture to lower the cost of package delivery in New Zealand, in order to create a more competitive international destination offering and facilitate higher levels of import package growth moving forward.
Domestic Division Transport volume levels for the six months to December were ahead of last year as a result of the excellent business development work in that division that has seen new accounts either trading or signed, approximating $5 million in annualised new revenue. The higher freight volumes in the Transport business unit have seen Fliway operating outside its network capacity, requiring short term supplementary capacity solutions that have come at a cost premium due largely to that capacity being consumed by the consequences of the Kaikoura earthquake which significantly increased the road freight task as rail freight was disabled.
Internally, the Transport business unit implemented cost initiatives as a result of anticipated lower volumes that reduced capacity, at a time when new business and customer uptrades saw volumes increase ahead of last years levels. This short term capacity shortfall created cost issues that will have more economic solutions implemented against them in the future.
In the Logistics business unit, warehousing revenues were slightly down on last year, with strong cost management delivering a comparable profit result to last year. As a result of the business development wins in the domestic division, Fliway will be increasing warehouse capacity in Auckland by a further 6,000 square metres, or approx. 20%, in quarter 3 to accommodate the new growth.
The roll out of the new Warehouse Management System is progressing well and will deliver productivity gains once fully implemented.
International Division EBITDA for the division was in line with last year, as a result of strong customer focus and good results from the business development team in winning new customers. The first half of FY17 saw significant changes in Flway International, with management changes, a continuation of low sea freight rates and some customer churn. The management team of the division has been re-organised and is performing well under the new leadership, strengthening relationships with network partners, customers and carriers.
As part of the customer focus initiatives in International, progress is being made on creating improved technological solutions to deliver for customers improved data and visibilty whilst at the same time moving to a paperless environment with improved workflow.
UPS-Fliway Joint Venture In 1H17 import packages handled by the joint venture grew on the prior year by 13% and with a more competitive import cost, the expectation is to further grow these import volumes to produce higher financial returns in the future. The contribution from the UPS-Fliway joint venture was down on last year, with NPAT down by $0.155 million, as a result of a strategy designed to improve the cost of delivering a package in New Zealand in order to drive continued import package growth.
GROUP CASHFLOWS AND DEBT
Operating cashflows were $1.1 million compared to the prior year's half figure of $3.0 million, as a result of the lower earnings and an increase in working capital levels by $1.2 million. The higher revenues in December 2016 pushed debtor levels and with lower payables saw net working capital lift on the prior year, with the intention to manage this position back to historical levels, subject to continued revenue growth.
Net capital expenditure for the half year was $1.6 million, with $1.3 million of that spend relating to truck expenditure as Fliway returns to a more normal vehicle replacement cycle. The prior year FY16 truck spend was suppressed due to the significant fleet refresh in FY15 ahead of the NZX listing.
Fliway debt levels at 31 December 2016 were $8.8 million as compared to a bank facility of $18 million and represent 1.5 times EBITDA, ensuring the balance sheet gearing still allows room for growth.
Consistent with prospectus and historical guidance with respect to the percentage of NPAT payable and the weighting between the first half and second half earnings, Fliway's Directors have approved the payment of an interim ordinary dividend of 2.0 cents per share. The dividends are payable on 20 April 2017 to shareholders recorded on the share register as at 5:00pm (New Zealand time) on 31 March 2017.
The first half reflects a perid of change in the business and a re-positioning for future growth. Transport capacity, margins and cost management remain priorities for the Group in order to convert the significant new customer wins in 1H17 into improved profitability in 2H17.
The balance sheet and declared dividend remain conservative to ensure capacity exists in whatever form required to convert the strong sales pipeline into improved future earnings.
Sales growth remains a focus for the Group as Fliway looks to sell to capacity in it's network and increase relationships with existing customers and business partners. 1H17 volumes finished the year strongly and with significant new customer wins still to come on board, it is our expectation that current momentum will be continued, giving us confidence that 2H17 will deliver improved results over the prior year.
For further information, please contact Duncan Hawkesby, Managing Director, telephone +64 9 255 4600, or +64 21 882 882 or email [email protected]
INTERIM RESULT (FOR THE SIX MONTHS ENDED 31 DECEMBER 2016) 8:42am, 9 Feb 2017 | HALFYR SKYCITY Entertainment Group Limited 2017 Interim Result Summary of six months to 31/12/16 Reported: Net Profit After Tax: $83.8m (+$12.8) +18.0%, 12.7cps Normalised: Net Profit After Tax: $83.7m (-$1.7m) -2.0%, 12.7cps Name of Listed Issuer: SKYCITY Entertainment Group Limited
CONSOLIDATED OPERATING STATEMENT Current Interim Period NZ$: Up/Down %: Previous Corresponding Period NZ$
TOTAL REVENUE (excl GST) (REPORTED) $484.2m: down 5.7%: $513.7m NET PROFIT AFTER TAX (REPORTED) $83.8m: up 18.0%: $71.0m EARNINGS PER SHARE (REPORTED) 12.7cps: up from 12.0cps
TOTAL REVENUE (excl GST) (NORMALISED) $477.9m: down 6.4%: $510.6m NET PROFIT AFTER TAX (NORMALISED) $83.7m: down 2.0%: $85.4m EARNINGS PER SHARE (NORMALISED) 12.7cps: down from 14.5cps
INTERIM DISTRIBUTION 10.0cps Record date: 3 March 2017, Payment date 17 March 2017 Dividend Reinvestment Plan will apply to the FY17 interim dividend
INTERIM RESULT ANNOUNCEMENT Refer company presentation - attached
SKC - Interim 2017.pdf
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8:30am, 13 Feb 2017 | HALFYR CONTACT ENERGY 2017 HALF YEAR RESULTS
Name of Listed Issuer: Contact Energy Limited
For the six months ended: 31 December 2016
This report has been prepared in a manner which complies with New Zealand generally accepted accounting practice and gives a true and fair view of the matters to which the report relates and is based on unaudited accounts.
CONSOLIDATED INCOME STATEMENT
Current Half Year NZ$m; Up/Down %; Previous Corresponding six months NZ$m
EBITDAF (Earnings before net interest expense, tax, depreciation, amortisation, change in fair value of financial instruments and other significant items – non-statutory measure) $261m; up 2.8%; $254m
PROFIT/(LOSS) FOR THE PERIOD: $96m; up 182.8%; ($116m)
BASIC EARNINGS PER SHARE: 13.5 CPS; up 184.9%; (15.9) CPS
UNDERLYING PROFIT (excludes significant items that do not reflect the ongoing performance of the Group – non-statutory measure) $82m; up 12.3%; $73m
BASIC UNDERLYING PROFIT PER SHARE: 11.5 CPS; up 15.0%; 10.0 CPS
INTERIM CASH DIVIDEND: 11.0 CPS
Record date: 28 February 2017
Dividend Payment Date: 17 March 2017
Monday 13 February 2017
Contact EBITDAF up 3%, despite subdued electricity demand
• Improved customer advocacy, with a Net Promoter Score of +12, up from -3 in 1H16 • New products and pricing aligned to value increased Contact’s mass market retail netback by $1 per megawatt hour (MWh) • New Zealand electricity demand down 2.0%; Contact electricity sales volumes down 0.6% • Cost of energy improved by $10m (7%); 84% renewable generation, up from 78% in 1H16 • Other operating expenses reduced by $4m, or 3% to $128 million • Safety performance improvement with TRIFR down to 1.2 from 3.1 in 1H16 • Face value of borrowings reduced by $21 million
Overview of results
“The first half of the 2017 financial year (1H17) saw Contact modestly grow earnings with continued improvements in retail operating performance and an increase in the proportion of renewable generation. In a competitive market, delivering strong operational performance and providing value for customers and shareholders remains the focus,” said Dennis Barnes, Contact Chief Executive.
Contact reported a statutory profit for the six months ended 31 December 2016 of $96 million; $212 million higher than the prior corresponding period due to improved operating earnings without a repeat of the prior period impairments. EBITDAF increased by $7 million, or 3%, to $261 million while underlying profit after tax increased by $9 million or 12% to $82 million. Free cash flow for the period remained strong at $141 million, a $62 million reduction over 1H16, which included a tax credit driven by the closure of the Otahuhu power station together with increased extractions from gas storage and the late collection of FY15 debtors favourably impacting working capital movements.
The Board has resolved to maintain the interim dividend at 11 cents per share (1H16 11 cents) imputed to 8 cents per share. This represents a pay-out ratio of 96% of Contact’s underlying profit. Contact remains committed to maintaining an investment grade credit rating and continued to reduce gearing levels with a $21 million reduction in debt during the period. Continued strong cash flow has Contact on target to return the net debt to EBITDA ratio to the preferred 2.6 to 3 times range.
”We have made progress in transforming our Customer business. We have focused on delivering products which provide customers with greater choice, certainty and control and incorporated feedback to drive improvements in customer experience. The Customer business recorded a $6 million improvement in EBITDAF on the back of our operational focus,” said Mr Barnes.
Mass market electricity sales volumes were down by 110 GWh as average electricity usage decreased due to above average temperatures and newly acquired business customers using less energy than those they replaced. Average customer numbers were down by 1,100 on 1H16 due to the continued elevated level of competition, including price discounting by large competitors and benign wholesale conditions that supported offerings by new entrants. The reduction in mass market sales was largely offset by increased commercial and industrial sales.
“We have recently completed the simplification and migration of our core IT systems to the Cloud which, amongst other things, will make it easier for us to deliver services through lower cost mobile and online channels. We have also embedded data and analytics capability to better understand our customers’ needs, with real-time customer insight improving the customer experience as well as lowering future operating costs. I expect these changes will allow us to continue reducing operating costs,” Mr Barnes said.
National electricity demand declined by 2% in 1H17 primarily driven by lower consumption in the residential sector and lower irrigation demand. Warmer temperatures and above average rainfall both contributed to the reduced electricity demand and also resulted in higher hydro generation, lower wholesale electricity prices and limited price volatility.
“The flexibility of our portfolio and low levels of contracted gas were a real asset over the past 6 months. With high levels of renewable generation available in the market, we were able to reduce generation from our thermal plants and purchase lower cost energy from wholesale market participants. This trading strategy, combined with reduced electricity purchases and careful management of costs, resulted in a $1 million improvement in EBITDAF from our Generation business,” said Mr Barnes.
Contact’s strategy remains centred on optimising the Customer and Generation businesses to deliver strong cash flows which are ultimately for distribution to shareholders.
“In the last six months we have moved to report the performance of our Customer and Generation businesses separately. The focus this brings will be used to monitor and drive improved performance in both businesses and ultimately deliver value for shareholders.
We expect our operational improvement initiatives to continue to reduce our costs. In time our large customer base and world class systems will provide an attractive opportunity for partners to join us in providing value for our customers beyond energy as we continue our evolution from an essential services business to a broader ‘living services’ business.
We will continue to focus on the structural efficiency of the electricity supply market. This includes the commencement of the 80 megawatt financial agreement with Meridian Energy to support the continued operation of the Tiwai aluminium smelter. With a quality portfolio of long life generation assets we will continue to lower the cost of energy through fuel substitution, electricity trading and gains realised through the execution of our continuous improvement programme,” said Mr Barnes.
Investor enquiries: Matthew Forbes +64 21 072 8578
8:36am, 13 Feb 2017 | FLLYR PFI ANNOUNCES RECORD ANNUAL RESULTS
Highlights - Record profit after tax for the year of $123.4 million or 27.42 cents per share - Distributable profit (1) for the year of 7.58 cents per share - Fourth quarter cash dividend of 2.05 cents per share, total cash dividends for the year of 7.35 cents per share, an increase of 0.05 cents per share over the prior year - 2017 distributable profit guidance of between 7.50 and 7.70 cents per share (2), dividend guidance of at least 7.35 cents per share - Strong balance sheet maintained, committed gearing of 31.0% - $88.2 million or 8.9% portfolio revaluation uplift, 14.4% increase in net tangible assets per share to 160.7 cents - 74% of contract rent varied, leased or reviewed during the year - Portfolio occupancy at 99.6%, 2017 expiries of 11.2% - $14.2 million acquisition and $8.3 million divestment settled after year-end
NZX listed industrial property landlord Property for Industry Limited (PFI, the company) today announced record results for the year ended 31 December 2016.
“Persistence and patience” is PFI Chairman Peter Masfen’s summary of 2016. “We’ve maintained our focus on industrial property, concentrated on extracting value from strong Auckland demand, and watched and waited for favourable investment opportunities. A record profit, but— more importantly— another year of PFI delivering on its promise: consistent, long-term performance and strong, stable returns.”
Financial performance (refer appendix 1) Operating revenues for the year increased by $4.2 million or 6.2% over the prior year to $71.1 million, as increases due to acquisitions ($2.0 million), completed developments and rentalised capital expenditure ($1.4 million) and positive leasing activity ($1.3 million) were partially offset by decreases due to disposals ($0.5 million).
Operating expenses for the year of $28.0 million were down $2.4 million or 7.9%. A reduction in interest expense and bank fees of $1.6 million, driven by a reduction in the weighted average cost of debt of almost 50 basis points, was responsible for the majority of this reduction, but reductions in non-recoverable property costs (decrease of $0.5 million) and management fees (decrease of $0.3 million) also contributed. As a result of these decreases, the ratio of operating expenses to operating revenues reduced to 39.3% from 45.4%.
PFI’s effective current tax rate for the year, being the ratio of current taxation to operating earnings, remained static at 19.8% (2015: 19.6%).
Non-operating income and expenses, which, for the most part, comprised an $88.2 million fair value gain on investment properties, were more than double the amount in prior year. After allowing for these non-operating income and expenses and deferred tax, the company made a record profit after tax of $123.4 million.
Distributable profit and dividends (refer appendix 2) PFI recorded distributable profit of 7.58 cents per share for the year, an increase of 0.57 cents per share or 8.1% over the prior year (2015: 7.01 cents per share).
The PFI board has today resolved to pay a fourth quarter final cash dividend of 2.05 cents per share. The dividend will have imputation credits of 0.50 cents per share attached and a supplementary dividend of 0.23 cents per share will be paid to non-resident shareholders. The record date for the dividend is 27 February 2017 and the payment date is 8 March 2017. The dividend reinvestment scheme (DRS) will not operate for this dividend.
The fourth quarter final dividend will take cash dividends for the year to 7.35 cents per share, an increase of 0.05 cents per share over the prior year, resulting in a dividend pay-out ratio of 97% (2015: 106%).
Guidance PFI Chairman Peter Masfen said: “Looking to 2017, we expect distributable profit before management performance fees, if any, to be between 7.50 and 7.70 cents per share, subject as always to economic conditions.”
The company has, for the first time, today released an analysis of Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO), calculated in accordance with the Property Council of Australia’s best practice guidelines (3). These calculations show that PFI’s recorded FFO earnings of 7.99 cents per share and AFFO earnings of 6.95 cents per share, resulting in a FFO dividend pay-out ratio of 92% and an AFFO pay-out ratio of 106%.
Peter Masfen continued: “For some investors, FFO and AFFO earnings are important measures, as there is a belief that they help investors better understand and compare the underlying financial performance of property entities. Some investors also advocate for an AFFO dividend pay-out ratio that is less than 100%.
“That said, there are other investors for whom maintaining at least the current level of— or growing— cash dividends is more desirable.
“The PFI board is looking to balance these views by maintaining or gradually increasing cash dividends, whilst at the same time seeking to grow AFFO earnings to cover those dividends. That being the case, we expect to pay a cash dividend of at least 7.35 cents per share in 2017.”
Balance sheet PFI’s net tangible assets per share increased during the year by 20.2 cents per share or 14.4% to 160.7 cents per share. The $88.2 million fair value gain on investment properties, discussed further in the portfolio performance section below, accounted for 19.5 cents per share of the increase, with other minor items accounting for the remaining increase of 0.7 cents per share.
Capital management PFI carried out a number of capital management initiatives during the year to ensure that the company maintained a strong balance sheet.
The company’s DRS operated throughout the year raising $7.5 million.
In February 2016, the company’s $375 million syndicated bank loan facility was refinanced on competitive terms. Existing lenders ANZ, BNZ, CBA and Westpac committed two $187.5 million tranches until May 2020 and 2021, extending the average term to expiry to 3.8 years as at end of the year. The cost of the facilities was also reduced as part of this process.
In addition to these facilities, PFI maintained current total hedging (4) with a notional value of $313 million at an average rate of 4.31% for an average duration of 3.0 years. This current hedge rate is forecast to remain at low rates during 2017: based on current hedging and debt levels, an average of ~65% of the company’s debt will be hedged at an average rate of ~4.46% (beginning of 2016: average of ~73% hedged at an average rate of 4.61%). The fair value of this hedging – recorded on PFI’s statement of financial position – was largely unchanged at year-end (2016: liability of $10.0 million, 2015: liability of $10.4 million) despite significant volatility during the course of the year as a result of changes in market interest rates.
When combined with the syndicated bank loan facility PFI’s hedging provides the company with a weighted average cost of debt (WACOD) of 5.24% (5), which has continued to trend downwards (WACOD at December 2015: 5.71%), as historic expensive hedging rolled off during the year and was replaced with hedging at lower rates and low BKBM rates.
The company ended the year with adjusted gearing (6) of 30.1%. Following the settlement of 11 Turin Place, East Tamaki (see development, divestments and acquisition below), PFI’s gearing increased slightly to 31.0%, well within the company’s self-imposed gearing limit of 40% and bank covenants of 50%. The interest cover ratio (7) of 3.4 times was also well within bank covenants of 2.0 times.
Portfolio performance (refer attached PDF for table)
Further to the announcement in December, PFI recorded an annual increase from independent valuations in the value of its property portfolio of $88.2 million or 8.9% to $1,083.3 million. An active year of portfolio management resulted in a number of individual property values increasing. High levels of demand for industrial property from both investors and owner occupiers, spurred on by low interest rates, also influenced the increase. As a result of the year-end valuation process, PFI’s passing yield firmed from 7.33% to 6.69%, and on a portfolio basis there is now no over or under renting.
Nearly 123,000 square metres representing 18% of PFI’s existing portfolio was leased during the year to 32 new and existing tenants for an average term of 4.9 years. More than 80% of the contract rent secured by this leasing was as a result of lease renewals with 25 PFI tenants for an average term of 4.6 years. In addition to this, seven new leases were secured for an average term of 6.7 years. Incentives required to attract and retain tenants have reduced noticeably during 2016, with an average incentive of just 0.3 months per year of lease term being recorded in 2016.
Included in the aforementioned totals was the lease of 3,872 square metres to Boxkraft at PFI’s 80 Hugo Johnston Drive property in Penrose. This property is one of the five purchased by PFI in August 2015 from Sistema Plastics, with Boxkraft’s lease commencing shortly after Sistema’s departure in January 2017.
The company also completed rent reviews on 84 leases during the year, resulting in an average annual uplift of 1.5% on $41.6 million of contract rent.
Looking forward, PFI’s near term leasing outlook remains positive: at year-end the company’s portfolio was almost 100% occupied and 11.2% of contract rent is due to expire during 2017 (as at 31 December 2015: 9.3% was due to expire during 2016). In total, ~68% of PFI’s portfolio is subject to some form of lease event during 2017, and PFI will continue to be able to access projected market rental growth as ~35% of those lease events (8) are market related.
Development, divestments and acquisition The company’s $25.9 million development of four pre-leased bulk store facilities at 124 Hewletts Road in Mount Maunganui, was completed in June 2016 ahead of schedule and under budget. A new $1.9 million warehouse at 54 Carbine Road & 6a Donnor Place, Mount Wellington was also completed during the first half of the year, with tenant commitment secured during the build process.
The sale of PFI’s non-core property at 85 Cavendish Drive, Manukau, settled in February 2016, with the funds realised from that sale being reinvested into the aforementioned developments. In December 2016, the company contracted to sell a property at 27 Zelanian Drive, East Tamaki, for a net sales price of $8.3 million. The sale of this vacant property settled subsequent to year-end on 1 February 2017.
Also subsequent to year-end, on 2 February 2017, PFI purchased an industrial property at 11 Turin Place, East Tamaki. The property is leased for 15 years to Thermakraft— a market leader in building and wall wrap, roofing underlay, and window flashing tape— and the lease provides fixed rental growth of 4.55% every two years. The property was purchased in a sale and lease back transaction for a net purchase price of $14.2 million, representing a yield on purchase of 6.5%.
Market update ANZ estimate that the New Zealand economy grew around 3.5% over 2016, and suggest that a similar pace of annualised growth will be achieved for at least the first half of 2017. Paul Bloxham, the HSBC economist who branded New Zealand as the "rock-star economy" of the OECD in 2014, has said he expects the country's economy to continue to outperform many of its peers in the coming years.
This positive period of economic growth, say Colliers International, is reflected in the industrial sector. “The recurring commentary,” they say, “is the lack of stock.” Access to suitable levels of stock remains a vital ingredient for an expanding market and across the country demand is outweighing supply. They believe the medium-term outlook for the industrial sector is robust.
CBRE point out that the amount of new industrial supply that entered the market in 2016 is the largest since 2007, and they expect 2017 to be another strong year, with no significant slowdown in construction activity and with more speculative developments in the pipeline than in recent years. Nevertheless, they say given that economic forecasters have unanimously revised New Zealand’s growth prospects upwards, and because the industrial property market is highly correlated with overall GDP trends, they expect strong demand for industrial space in 2017. Consequently, they expect overall industrial vacancy to be stable in 2017 at below 2%. They also predict yields will largely be stable in 2017.
Strategy and outlook PFI remains focused on its strategy of investing in quality industrial property in New Zealand’s main urban centres. The company will continue to drive shareholder returns by actively managing vacancy and upcoming lease expiries, opportunistically pursuing both core and value-add industrial acquisitions, maximising utilisation of the portfolio and divesting of non-core assets when value has been maximised and an opportunity to recycle capital into industrial property arises.
“Commentators are very positive about New Zealand’s economic prospects for 2017,” says Peter Masfen, “but we should not ignore their caveats: as the ANZ says, ‘the world is awash with risks and challenges’. At PFI, we’ll take it carefully and stay focused on the long-term. That is the key to successful investing.”
Craig Peirce Chief Financial Officer and Company Secretary Phone: +64 9 303 9651 Email: [email protected]
About PFI PFI is New Zealand's only listed company specialising in industrial property. PFI's portfolio of 84 industrial properties in Auckland, Hamilton, Mount Maunganui, Wellington and Christchurch, is leased to 143 tenants (9).
Attachments NZX Appendix 1 – 12ME 31 December 2016 NZX Appendix 1 – 12ME 31 December 2016 – Financial Statements NZX Appendix 7 – 12ME 31 December 2016 NZX Annual Results Presentation – 12ME 31 December 2016
Appendices (refer attached PDF for appendices)
(1) Distributable profit is a non-GAAP performance measure used by the PFI board in determining dividends to shareholders. Please refer to the appendices for more detail as to how this measure is calculated. (2) Before management performance fees, if any. (3) FFO and AFFO are non-GAAP financial information and are common investor metrics. Please refer to the appendices for more detail as to how this measure is calculated. (4) PFI defines hedging as any debt that has an interest rate secured for more than three months. (5) As at 31 December 2016. Weighted average cost of debt comprises BKBM, hedging, margins and all borrowings related fees. (6) That is, total borrowings as a percentage of the most recent independent valuation of the property portfolio, adjusted for the sale of 27 Zelanian Drive, which had been unconditionally sold as at 31 December 2016 and settled on 1 February 2017. (7) That is, the ratio of interest expense and bank fees to operating earnings excluding interest expense and bank fees. (8) Being ~23% of total contract rent. (9) As at 13 February 2017.
NZX builds and operates capital, risk and commodity markets and the infrastructure required to support them. We provide high quality information, data and tools to support business decision making. We aim to make a meaningful difference to wealth creation for our shareholders and the individuals, businesses and economies in which we operate. To learn more about NZX, please visit: http://www.nzxgroup.com
nzx 2016 Results.pdf
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Continuing strong growth in infant formula drives record results for The a2 Milk Company
Half-year earnings exceed those for the full financial year 2016
Overview – financial results for the half-year ended 31 December 2016 (NZ$m)
- Total revenue of $256.1 million – an increase of 84% over the prior corresponding period (pcp)
- Operating EBITDA1 of $64.1 million – 243% ahead of the pcp
- Net profit after tax of $39.4 million – 290% ahead of the pcp
- Continuing strong growth in sales and market share for a2 Platinum® infant formula in Australia and China
- Sales growth for fresh milk and whole milk powder in Australia
- Broader distribution and growing sales of fresh milk in the United States
- Increased sales and positive operating earnings in the United Kingdom
- Operating cash flow of $38.1 million – $48.1 million more than in the pcp
- Conservative management of infant formula inventory
The a2 Milk Company (“a2MC” or the “Company”) delivered a further step upward in performance in the first half of the 2017 financial year, with operating earnings and net profit at higher levels than those for the full 2016 financial year.
The half-year performance reflects outstanding results from the Australia/New Zealand (ANZ) and China businesses, driven primarily by continuing strong growth in demand for a2 Platinum® infant formula. Revenues increased by 62% and 348% in Australia and China respectively, and Operating EBITDA by 104% and 1,021% respectively. The growth rate in part reflects inventory shortages experienced during the pcp.
Results in the United Kingdom and United States also improved. The UK business increased sales and achieved positive operating earnings in the period, while the USA business achieved increased distribution and higher rates of sale in a number of key accounts.
Managing Director Geoffrey Babidge said: “The half-year results show continued progress against the Company’s objective of building a global brand based on the health and digestive benefits of nutritional products containing only the A2 beta casein protein – free of the A1 protein.
“This has involved continuing to grow the established positions in fresh milk and infant formula in Australia while also investing in the key international growth initiatives in China, the United States and the United Kingdom.
“The outstanding aspect of our half-year performance was the continuing growth in a2 Platinum® infant formula in both Australia and China, through a multi-channel strategy involving a combination of local distribution, ecommerce and overseas shopping (‘Daigou’) traders. The growth is driven predominantly by the growing recognition and trust of the a2™ brand amongst Chinese consumers, reflecting a strong communications platform that speaks directly to mothers and to health care professionals in both Australia and China.
“Whilst the growth in demand was evident across the half-year, there was a marked increase in infant formula sales in the 2nd quarter corresponding with the phasing of key sales events in China and an increase in market share in both Australia and China. This was achieved whilst maintaining a prudent approach to the management of production and inventory in recognition of foreshadowed changes in regulations for infant formula sold in China.”
The first half FY17 result included:
- ANZ EBITDA of $70.4 million
- China EBITDA of $13.7 million
- UK and USA EBITDA of ($7.7) million
- Corporate and other costs of $12.3 million
- Basic earnings per share (EPS) of 5.51c; and diluted EPS of 5.37c
The increase in corporate and other costs in the half is primarily a result of increased spend on business development and research and development costs associated with a higher level of business activity.
Cash on hand at 31 December 2016 increased significantly to $108.4 million, reflecting the increased earnings, together with pro-active management of working capital, particularly infant formula inventory levels, during the period.
As advised at the Annual Meeting in November 2016, provided that current trends in earnings and cash flow continue and there is no need for significant capital expenditure, the Board expects to adopt a dividend policy following the completion of FY17.
Board of Directors
In line with the Company’s previously announced policy of board renewal, Warwick Every-Burns was appointed an independent non-executive Director of the Company on 23 August 2016. Mr Every-Burns has been a career Consumer Packaged Goods (CPG) executive with relevant global experience, including senior roles with The Clorox Company of the USA, NationalPak (the Glad Products Company), Unilever and Treasury Wine Estates, and is currently a non-executive Director of Treasury Wine Estates.
Mel Miles retired as a Director on 23 August 2016 after six years on the Board, but continues to advise the Company in a consultancy role.
Strategic Agenda Update
The Company continues to focus on building a portfolio of milk-based nutritional products centred on the unique strengths of the A1 protein-free proposition. The broader nutritional strategy, from infant through to adult products, represents a natural evolution that the Company expects to be more attractive in the medium term than one based purely on traditional dairy.
While fresh milk and infant formula generate most of the revenue and earnings at this stage of the Company’s development, the product portfolio has been broadened through the launches of branded whole milk powder in Australia and China; fresh milk (sourced from Australia) into China; and UHT long life milk and infant formula in the UK.
Growth in the product portfolio will continue with the planned launch of additional nutritional products over the next 12 months.
As an outcome of the Company’s growing profile in the USA, an extension of its distribution footprint is progressing through a major retailer in the South East from March 2017. This development is referenced more fully in the relevant section below.
A comprehensive study and strategic review of the infant formula market in China was carried out in conjunction with a leading in-market consultancy during the period. The review has assisted in deepening the Company’s understanding of this market at a fundamental level and has confirmed broadly the Company’s current approach in China whilst also giving further insight into future opportunities.
The Company also progressed a review of growth opportunities in the South East Asian region.
The Company is strongly focused on building constructive relationships with supply and distribution partners in all markets. A particularly significant development during the half-year was the completion of a new Supply Agreement with our supply partner for a2 Platinum® infant formula, Synlait Milk. This new agreement, for a minimum term of five years, provides access to an agreed level of capacity beyond current requirements, an obligation on Synlait to supply to order, and does not include “take or pay” provisions.
The ANZ business has continued to show very strong momentum, with sales and operating earnings in Australia considerably ahead of plan and pcp. Total revenue across all product categories increased by 62% to $206.6 million and Operating EBITDA by 104% to $70.4 million.
Growth occurred in all categories, but was driven primarily by rapid expansion in sales of a2 Platinum® infant formula, which registered substantial gains in market share and sales volumes. The brand achieved a ~25% grocery/pharmacy scan market share for the 13 weeks ending 1 January 2017 by value, compared with 16.7% in the comparable period of the prior year.
a2 Platinum® has been the fastest-growing infant formula brand in the Australian market in both the last quarter and the moving annual total, and was the No. 2 brand by market share in the latest quarter.
Close attention has been and will continue to be applied to supply chain and inventory management, taking account of foreshadowed changes in the regulatory environment. Inventory remained at below average levels for the industry in part as a result of the continued expansion in sales. There is also a strong focus on maintaining deep insight into the ‘Daigou’ channel, including pricing, communication and customer management. The Daigou channel has become a significant and growing sales channel from Australia to consumers in China.
Sales of a2 Milk™ fresh milk increased by 3% over the pcp. Market share by value was stable at approximately 9.3% (Australian Grocery Weighted Scan 18 December 2016 MAT). a2 Milk™ and the a2 Platinum® brands enjoyed the highest level of advertising spend across the fresh milk and infant formula categories respectively for the 12 months ending 31 October 2016.
Sales of a2 Milk™ whole milk powder, launched in June 2015, grew significantly compared with the levels achieved in the pcp.
China and Other Asia
Sales and earnings from the China business grew very strongly in the half-year. Total revenue increased significantly to $37.7 million and Operating EBITDA increased to $13.7 million.
Growth in the half-year was driven by increased consumer demand aided by an increasing understanding of the unique attributes of nutritional products that contain only the A2 beta casein protein – free from A1 protein. The business continues to invest strategically in building that understanding through a promotional programme that includes extensive online activity and events in Mother & Baby stores (MBS).
The business has a flexible multi-channel infant formula strategy to achieve growth – in both China label (predominantly in MBS) and cross-border ANZ label online with major e-retailers. a2 Platinum® achieved ~2.6% value share in the quarter ending 31 December 2016 within the segment of the market as measured by Kantar. This share, while growing at a substantial rate, is modest in the context of the overall market in China and thus highlights a considerable growth opportunity for the Company.
Promotional activities have included a strong focus on communicating the benefits of a2 Platinum® infant formula through a testimonial approach, featuring mothers in China and Australia reporting on their own experiences and on educating health professionals.
The e-commerce strategy is centred on building strong relationships with profile providers such as Tmall, JD.com, Mia, Kaola, VIP and other strategic platforms. The promotional calendar has a strong bias towards the first half of the financial year given sales for the three largest e-retailer events fall predominately within the first six months.
Sales on ‘Singles Day’ more than doubled the levels achieved in the previous year across the top four e-commerce platforms, while a2 Platinum® achieved the No. 1 sales position in its category on JD.com. Sales momentum continued during the “12/12” sales event and the initial build for Chinese New Year.
The offline strategy is based on sustainably driving sales in MBS, growing the number of distribution points and significantly enhancing instore education and shopper marketing activities through investment in increased field resources and point of sale materials.
Sales of a2 Milk™ branded fresh milk sourced from Australia, in key premium retail stores and e-commerce platforms, also continued to grow from a small base.
The Company continues to closely monitor the regulation of infant and other nutritional products in China and in cross-border trade. It believes it is responding satisfactorily to the current phase of regulatory activity, including infant formula registration and labelling guidelines, and is focused on ensuring it remains well-positioned to deal with future developments.
The USA business made further progress against the objectives set out for its launch phase, with pleasing gains in distribution and sales velocity. The product is positioned in the specialty milk section, which is the fastest-growing segment of the total milk category.
The a2 Milk™ brand was launched in Southern California from April 2015 and Northern California from September 2015. Two major chains, Trader Joe’s and Target, began distribution in California during the half year. The business currently has distribution in about 1,800 stores in California, the Pacific Northwest and the home market of Colorado.
The sales focus remains on building unit sales per store per week (UPSW) relevant to the speciality milk category. The business is expected to deliver a progressive improvement in sales velocity in its key accounts during the financial year.
Marketing and communication activity increased during the half-year across digital and social media platforms, through retail promotions and through a public relations programme. The product range has received mainstream media coverage, notably through the Los Angeles Times Sunday Section, Fortune, Bloomberg Newsweek, Mother Jones, Forbes, New Nutrition journal, digital publications and television stations in Southern California, with reach extended further through online media.
Supply chain efficiency was enhanced through the engagement of a second dairy processor, in the Los Angeles basin, allowing the business to ship locally to the California market. The business also entered into a nonexclusive licence with its procurement partner, Prairieland Dairy in Nebraska, to build awareness and distribute fresh milk in the states of Kansas, Missouri and Nebraska under the a2 Milk™ brand.
The market entry strategy for the business has centred on launching primarily in California and building an understanding of the key drivers for growth in this market prior to expansion. The Company considers it now has a clearer view of the key factors for success in this market and other potential state markets. Accordingly, it is progressing an opportunity to expand its footprint significantly with a launch into the South East of the USA, in March, in association with the Publix Group. Publix is a highly-regarded major retailer with about 1,100 stores, primarily in Florida, Georgia and the Carolinas. We anticipate ranging in all stores. To support this launch, the business expects to increase its marketing spend in the second half.
The Company is very pleased with the opportunity to expand the USA business beyond the West Coast. We acknowledge that the timing is ahead of plan and the likely investment in the USA business will consequently be higher than previously assumed. Accordingly, we now estimate that the level of further investment in this business over this year and the subsequent two years prior to positive monthly EBITDA will be approximately US$30 - 35 million. Given these changes, we have determined it appropriate to writeoff NZ$2.2 million of capitalised USA intangible assets.
The United Kingdom business achieved a significant improvement in performance, with increased brand awareness, sales and positive operating earnings for the half-year for the first time. Sales of a2 Milk™ branded fresh milk grew in excess of 45% on the pcp. Average rates of sale in-store improved significantly and distribution in key retailer accounts is now approximately 1,400 stocking points.
This performance was achieved by a continuing focus on consumers and retail customers, with particular benefit from the ‘a2tonishing’ advertising campaign launched in May 2016 and continued into the half-year. The business also sought improved point of sale presence through its out-sourced field team and has recently achieved extra facings in a key account. The in-house digital team continued to build relationships and activities with consumers and the health care professional community.
UHT long life milk was launched in September 2016 in selected channels and grew at a satisfactory rate. The business is pleased with the continued growth of infant formula sales in the non-grocery segment and will assess the opportunity in the retail market during the next 12 months.
Research and development (R&D) and Intellectual property (IP)
The Company continues to drive and support R&D around the benefits of A1 protein-free products, and to develop its portfolio of intellectual property (including brand assets and proprietary know-how).
The breadth and depth of the IP portfolio, coupled with first mover advantage, continue to support our market position. The patent portfolio covers a range of compositional benefits and therapeutic uses of A1 protein-free products, with protection for some applications through to 2035.
R&D focus in the half-year included:
- Completion of a significant clinical study undertaken in China (600 participants) that has now been submitted for publication. The study builds upon digestive benefit findings from successful China pilot study published in April 2016 and gives further insight into digestive mechanisms;
- Concurrently a study conducted in China amongst pre-schoolers has been completed and the authors are currently preparing for publication. The results are understood to be aligned with adult findings around digestive and cognitive responses;
- A clinical study in association with Monash University, Australia, examining the benefits of a2 Milk™ for IBS (irritable bowel syndrome) sufferers is under way;
- Clinical examination of benefits to gut and systemic inflammation at a leading USA institution, Pennington Biomedical Research Centre is under way, and
- Work pursuant to a New Zealand government grant for research to support benefit claims in international markets has commenced.
In October 2016, UK-based Nutrition Journal reported that consumption of a2 Milk™ increases the natural production of the body’s key antioxidant – Glutathione (GSH), widely recognised for its association with a range of health benefits – in milk-intolerant consumers.
The Australian Federal Court case with the Lion Group initiated in June 2016 is scheduled to be heard in November 2017. The a2 Milk Company is pursuing Lion over what the Company believes are misleading and deceptive packaging and advertising claims. Lion has filed a cross claim challenging the way the Company promotes a2 Milk™. With the scientific evidence in support of the benefits of a2 Milk™ continuing to strengthen, the Company is confident in its position.
Full year FY17 outlook An update on the Group’s revenue and operating earnings for the four months to October 2016 was provided at the Annual Meeting on 22 November 2016. The Company has since delivered a very strong first half and performance in January 2017 is consistent with plan.
As previously indicated, the Company closely monitors the outlook relating to the regulatory environment for infant formula in China and likely competitor activity in each of our markets and consequently continues to adopt a prudent approach to inventory management.
Given that the timing of major selling events in China is weighted towards the first half, and as a result of our prudent approach to inventory management, the Company is anticipating lower infant formula sales during the second half relative to 1H17, although they will be materially higher than in 2H16. In addition, the investment in marketing will likely be higher in the second half by up to $15 million, based on the planned phasing of communication and development activities across the year, in particular for the USA and China.
For further information contact: The a2 Milk Company Limited Geoffrey Babidge Managing Director and CEO +61 2 9697 7000
Skellerup reaffirms FY17 Guidance and maintains interim dividend
Key points for the six months ending 31 December 2016 - Revenue of $97 million down 10% (in constant currency terms down 2%) and EBIT down 3% on prior corresponding period (pcp). Stronger NZD key driver of revenue reduction with earnings impact partially negated by underlying business improvements and hedging gains. - NPAT of $8.9 million down 7% on pcp. Finance costs $430k up as expected on increased debt associated with the recently completed integrated Dairy Rubberware facility at Wigram. - Interim Dividend maintained at 3.5 cents (fully imputed) per share. - FY17 NPAT guidance unchanged and expected to be in a range of $20 to $22 million. - New Wigram facility operating well and in line with expectations.
Solid underlying performance for most businesses and lower indirect costs helped negate much of the impact of the stronger NZD on Skellerup earnings for the six months to 31 December 2016. Lower sales into the Australian mining industry and the expected increase in finance costs were the primary cause of the reduction in NPAT.
Agri Division revenue was down 11% but EBIT was up 1% on pcp. CEO David Mair said that the reduction in revenue was due to lower dairy rubberware sales into the European market and NZD strength against all currencies.
“The European market remains soft with lower demand exacerbated by the weaker GBP & Euro. However, our overall earnings held to prior year levels due to a strong contribution from the US market, solid demand in NZ and Australia and FX hedging gains. We are cautiously optimistic that the recent improvement in the international milk price will continue to underpin solid demand in the second half of the year for our products, many of which are essential consumables, important for milk quality and animal health.”
Mr Mair also noted that Skellerup’s new integrated Dairy Rubberware Development and Manufacturing facility at Wigram was performing well, with all Agri activities now on site.
Industrial Division revenue was down 9% and EBIT down 6% on pcp. Mr Mair said the reduction in revenue was primarily due to lower sales into the Australian mining sector and NZD strength against all currencies.
“We have continued to improve our Industrial businesses, however lower sales into the West Australian mining sector more than offset the gains made in the first half of the year. We expect an improved contribution from the Industrial Division in the second half.”
Chair Liz Coutts said Skellerup’s results and financial position represented a solid performance and robust position and noted the Board and management are focussed on earnings growth.
“With the new Wigram facility complete, our focus is firmly on products and systems for food safety, potable and waste water applications. These continue to provide a resilient business platform for Skellerup. We are working hard to further translate this into stronger earnings growth.”
Skellerup’s Balance Sheet remains strong. With construction of the new Wigram facility complete, net debt was $35.6 million at 31 December 2016, representing just 23% of equity. The Board resolved to maintain the interim dividend, declaring a 3.5 cps pay-out, fully imputed. This will be paid out on 23 March 2017 to shareholders on the register at 5.00pm on 10 March 2017.
Mrs Coutts reaffirmed Skellerup expected FY17 net profit after tax to be in the range of $20 to $22 million.
For further information please contact: David Mair Chief Executive Officer 021 708 021
Graham Leaming Chief Financial Officer 021 271 9206
For media queries please contact: Geoff Senescall / John Redwood Senescall Akers Limited 021 481 234 / 021 581 234
Solid profit of $39.1 million and progresses developments 9:05am, 16 Feb 2017 | HALFYR PCT delivers solid profit of $39.1 million and progresses developments
Performance summary for the six months ended 31 December 2016 12.4% rise in net profit after tax and 3.7% lift in dividend
• Net profit after tax increased by 12.4% to $39.1 million (2016: $34.8 million) • Net operating income increased by 8.7% to $38.8 million (2016: $35.7 million) • Half year dividend of 2.80 cps (2016: 2.70 cps), representing a 3.7% YoY increase • Earnings and dividend guidance for FY17 unchanged at 6.2 cps and 5.6 cps respectively • Strong financial position with loan to value ratio of 20.1% (June 2016: 14.4%)
• Wynyard Quarter Stage One 100% leased, 8 months ahead of completion. The $35.9 million Mason Brothers Building was the first project to be completed in December and represents a major milestone for the business.
• Major new office leasing announced today with global law firm DLA Piper committing to the new PwC Tower at Commercial Bay taking pre-leasing, by income, at the new tower to 64% (Dec 15: 52%). • Pre-leasing across all of Precinct’s office developments is now 77%. • In December the agreement to acquire Queen Elizabeth Square from Auckland Council became unconditional and all resource consents were obtained.
99% portfolio occupancy and strong weighted lease term
• Leasing over the period has been strong, particularly in Wellington with overall occupancy rising to 99% (30 June 2016: 98%) • Weighted average lease term (WALT) across the portfolio is 5.9 years (June 2016: 6.3 years), increasing further out to 8.1 years after including developments. • Following the Kaikoura earthquake a $12 million devaluation has been booked at Deloitte House, based on provisional repair estimates.
Enhancing the strategy
• We are excited to announce today the conditional acquisition of a 50% interest in co-working space operator Generator. • Generator is well aligned with Precinct’s strategy of being a city centre specialist. It has a strong management team and offers the opportunity to expand the market in which Precinct operates and to enhance the amenity and service levels that Precinct can offer its clients.
Precinct Properties New Zealand Limited (Precinct) (NZX: PCT) reported its six-month results to 31 December 2016 today, with a net profit after tax (NPAT) of $39.1 million. This compared with $34.8 million for the same period last year, with the increase mainly attributable to lower interest and tax expense, and a fair value gain in financial instruments. Net operating income, which adjusts for a number of non-cash items, increased $3.1 million to $38.8 million (31 December 2015: $35.7 million) or 3.20 cents per share.
Scott Pritchard, Precinct’s CEO, said we achieved a number of milestones across our business and have significantly advanced our long term strategy.
“We committed to and commenced works at Bowen Campus in Wellington, progressed works at Commercial Bay including the demolition of the old shopping centre, enjoyed leasing success at Commercial Bay and completed the Mason Brothers building at Wynyard Quarter Stage One.”
“The completion of the Mason Brothers Building is a major milestone for the business as it is the first project to be completed and sees Precinct begin to transform its portfolio,” he said.
Leasing momentum at Commercial Bay continues. Global law firm DLA Piper committed to 2,700 square metres within the new tower taking office pre-leasing, by income, to 64%. “Importantly this commitment comes from outside the portfolio and illustrates the attraction of this CBD waterfront precinct.” Scott Pritchard, Precinct’s CEO, said.
In December the agreement to acquire Queen Elizabeth Square from Auckland Council became unconditional. The land is now formally incorporated into the Commercial Bay retail development due to open in late 2018. This provides certainty to allow the retail leasing programme to advance responding to significant interest from retailers.
In addition to these milestones, Precinct can today announce the conditional acquisition of a 50% interest in Generator. Generator, established in 2011, operates 3,000 square metres of co-working space over three sites within the Britomart precinct in Auckland’s CBD.
“Generator is well aligned with Precinct’s values and its strategy of being a city centre specialist. It has a strong management team and offers the opportunity to enhance the amenity and service levels that Precinct can offer its clients. It will also enable Precinct to expand its traditional client base with smaller businesses, helping to grow occupancy and demand,” he said.
Net property income (NPI) reduced to $45.9 million (31 December 2015: $53.7 million). After adjusting for recent asset sales and foregone income associated with our development projects, like for like income was $0.7 million lower than the comparative period. This reduction was a result of the 14 November Kaikoura earthquake. After allowing for the rental abatement at Deloitte House and earthquake related costs like for like income was slightly higher than the comparative period.
Precinct’s Wellington portfolio performed very well during the earthquake with all but Deloitte House being assessed by engineers and reopened within 48 hours.
Precinct's structural engineer, Holmes Consulting, were instructed to undertake a detailed structural investigation of Deloitte House which concluded relatively minor structural damage had occurred. Notwithstanding this, further detailed assessments have identified that the seismic strength of the building is lower than previous assessments. An internal review of the 30 June 2016 property valuations indicated no material value movement in the period for all the assets apart from Deloitte House in Wellington.
The provisional estimated cost associated with remediating the damage and making seismic improvements resulted in the independent valuation of Deloitte House falling by $12.1 million to $33.4 million (June 2016: $45 million). The value of net tangible assets per share at interim balance date was $1.17 (June 2016: $1.17). Further financial information can be found within the 2017 Interim Report. You can find these at www.precinct.co.nz/interim-report-2017
Wynyard Quarter Stage One The Mason Brothers building reached practical completion fully leased in December. Mason Brothers, valued at $35.9 million, is leased to Warren and Mahoney, ATEED and Mott McDonald on a WALT of 8.4 years.
The Innovation Building (Building 5A) is expected to be completed in July 2017. Overall Stage One is now 100% leased on an average lease term of 10.5 years and is expected to deliver a return on cost of at least 15%.
Following the commitment by DLA Piper, the new PwC Tower is now 64% leased by income (Dec 15: 52%) on a WALT of 13.3 years. This commitment takes the amount of space secured outside the portfolio to 8,000 square metres or around a third of committed leases. Interest in the retail centre remains strong and we look forward to sharing more leasing success during 2017 following the unconditional acquisition of Queen Elizabeth Square.
Construction is progressing well. Demolition of the old Downtown Shopping Centre is now complete. Excavation, retaining and piling have all commenced and are expected to be largely complete by the middle of 2017.
Works at Bowen Campus commenced in November. The first phase of construction will include the demolition of fixtures and fittings and the removal of the original facade.
Leasing over the period has been strong with overall occupancy rising to 99% (30 June 2016: 98%). This was mainly the result of new leases in 157 Lambton Quay and HSBC House. The Auckland portfolio continues to perform well with occupancy maintained at 100%.
Over the 6 months to 31 December 2016, Precinct secured 18 new leases covering 7,354 square metres. This included securing Dimension Data in 157 Lambton Quay, maintaining a strong portfolio WALT of 5.9 years. Vacant space over the 6 months has been significantly reduced, with around 1,000 square metres of office space remaining.
Precinct settled 41 rent reviews during the period, covering an area of 50,855 square metres. These resulted in a 3.8% uplift on passing rent, and 2.6 % increase on valuation rents at 30 June 2016.
At 31 December Precinct’s WALT across the investment portfolio was 5.9 years, increasing to 8.1 years when the development pre-leasing is included (June 2016: 6.3 & 8.2 years). This strong investment portfolio WALT includes the recently opened Mason Brothers Building.
OFFICE MARKET UPDATE
The overall Auckland CBD office vacancy rate remains at historically low levels. The Auckland prime CBD office vacancy rate decreased during the six months to December 2016, down to 2.6% (June 2016: 3.3%).
The Wellington prime CBD office vacancy rate has also decreased significantly as a result of earthquake and non-earthquake related leasing and confirmation of Government leasing. According to the latest survey, prime vacancy decreased to 1.0% (June 2016: 3.4%).
Precinct shareholders will receive a second-quarter dividend of 1.40 cents per share plus imputation credits of 0.1855 cents per share. Offshore investors will receive an additional supplementary dividend of 0.08419 cents per share to offset non-resident withholding tax. The record date is 2 March 2017. Payment will be made on 16 March 2017.
Full-year operating earnings after tax are expected to be around 6.2 cents per share (before performance fees). While earnings are expected to be impacted by rental abatement at Deloitte House, this is currently expected to be largely offset by stronger occupancy elsewhere in the Wellington portfolio. Dividend guidance for the 2017 financial year remains unchanged at 5.6 cents per share.
8:30am, 17 Feb 2017 | HALFYR THE CITY OF LONDON INVESTMENT TRUST PLC Unaudited Results for the Half-Year Ended 31 December 2016
This announcement contains regulated information
INVESTMENT OBJECTIVE The Company's objective is to provide long-term growth in income and capital, principally by investment in equities listed on the London Stock Exchange. The Board continues to recognise the importance of dividend income to shareholders.
As at 31 December 2016 As at 30 June 2016 Net asset value per ordinary share 405.2p 382.2p Premium/(discount) 0.2% (1.1%) Net asset value per ordinary share (debt at fair value) 399.7p 378.6p Premium/(discount) (debt at fair value) 1.6% (0.1%) Ordinary share price 406.0p 378.1p Gearing (at par value) 6.7% 8.0%
Dividend yields As at 31 December 2016 As at 30 June 2016 The City of London Investment Trust plc 4.0% 4.2% AIC UK Equity Income Sector (Benchmark) 3.6% 3.9% FTSE All-Share Index 3.8% 3.7% UK Equity Income OEIC Sector 4.3% 4.8%
Sources: Morningstar for the AIC, Bloomberg
Total return performance (including dividends reinvested and excluding transaction costs) 6 months % 1 year % 3 years % 5 years % 10 years % Net asset value per ordinary share1 7.8 9.5 21.7 78.4 89.2 AIC UK Equity Income sector average – net asset value2 9.2 10.0 21.8 82.2 86.7 Ordinary share price 9.6 9.4 21.1 75.4 107.5 FTSE All-Share Index 12.0 16.8 19.3 61.8 71.8 UK Equity Income OEIC sector average3 11.7 8.9 19.2 70.5 63.0
Sources: Morningstar for the AIC, Henderson, Datastream
1. Using cum income fair value NAV for six months, one, three and five years and capital NAV plus income reinvested for ten years 2. AIC UK Equity Income sector size weighted average NAV total return (shareholders’ funds) 3. The IA peer group average is based on mid-day NAV whereas the returns of the investment trust are calculated using close of business NAV
INTERIM MANAGEMENT REPORT
Net Asset Value Total Return During the six months to 31 December 2016, the UK economy grew stronger than many had expected following the referendum result. Consumer spending was the most important factor with the Bank of England cutting interest rates in August 2016 to 0.25%. Global growth was also robust and reflected in rising commodity prices. In particular, the oil price was helped by demand from China and a renewed commitment to restrict production from OPEC, the oil producing countries’ cartel.
Against this economic background, the UK equity market was led by cyclical and commodity related sectors. City of London’s net asset total return over the six months was 7.8% which was behind the average for the UK Equity Income Investment Trust sector of 9.2% and the FTSE All-Share Index of 12.0%. The two most important sector detractors from performance were below average exposure to mining and banks. Our overweight position in defensive sectors, such as utilities, also had an adverse effect during this period. Finally, the move to fair value our 4.53% secured notes 2029 reduced our return by 0.6%.
On the other hand, the underweight position in the pharmaceutical sector and the holdings in Ibstock (brick manufacturer), TUI (travel company) and Provident Financial (non-standard lender) were all notably positive contributors.
Earnings and Dividends City of London’s revenue earnings per share rose by 0.6% to 6.76p. So far this financial year, City of London has declared two interim dividends of 4.05p each. City of London’s diverse portfolio, strong cash flow and revenue reserves give the Board confidence that they will be able to increase the dividend for a fifty-first consecutive year. The quarterly rate will be reviewed by the Board before the third interim is declared in April 2017.
Expenses The ongoing charge which represents the investment management fee and other non-interest bearing expenses as a percentage of shareholders’ funds remains low compared with most other equity products. The ongoing charge for the six months indicates a full year rate of 0.42% of net assets.
Material events and transactions during the period A total of 11.325 million new shares were issued in the six months to 31 December 2016 at a premium to net asset value. The proceeds were invested in a mixture of additions to existing investments as well as three new holdings. A notable addition was made to Lloyds Banking which moved over the six months from twentieth to ninth largest holding partly through share price appreciation. New holdings were purchased in Civitas (real estate investment trust specialising in social housing), Innogy (utility) and Smith & Nephew (developer and marketer of advanced medical devices). There were outright sales of Greencore (food manufacturer) after a strong share price performance while Rolls-Royce and Laird were sold after profit warnings.
No shares have been issued since the period end.
Overall, gearing was reduced over the six months by 1.3 percentage points to 6.7%.
Outlook for the six months to June 2017 The effect of the fall in sterling on the cost of imports and the rise in commodity prices is likely to lead to an increase in UK inflation. On the other hand, uncertainty ahead of the UK’s exit from the European Union could lead to reduced corporate investment which would have a negative effect on UK economic growth. In the US, President Trump may stimulate growth through tax cuts and infrastructure spending. However, the Federal Reserve is likely to continue to increase interest rates given the length of the current economic upswing.
City of London is predominantly invested in large capitalisation, UK listed companies with global operations. Given the uncertainties, the diversified nature of the portfolio should be an advantage. The dividend yield being generated and quality of these businesses gives us confidence for the future.
Philip Remnant CBE Chairman 16 February 2017
PRINCIPAL RISKS AND UNCERTAINTIES The principal risks and uncertainties associated with the Company’s business can be divided into the following main areas:
• Portfolio and market price • Investment activity, gearing and performance • Tax and regulatory • Operational
Information on these risks and how they are managed are given in the Annual Report for the year ended 30 June 2016. In the view of the Board these principal risks and uncertainties are as applicable to the remaining six months of the financial year as they were to the six months under review.
DIRECTORS’ RESPONSIBILITY STATEMENT The Directors confirm that, to the best of their knowledge:
• the condensed set of financial statements has been prepared in accordance with FRS 104 “Interim Financial Reporting”;
• the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.7R (indication of important events during the first six months and description of the principal risks and uncertainties for the remaining six months of the year); and
• the Interim Management Report includes a fair review of the information required by Disclosure Guidance and Transparency Rule 4.2.8R (disclosure of related party transactions and changes therein).
For and on behalf of the Board Philip Remnant CBE Chairman 16 February 2017
INCOME STATEMENT (Unaudited) Half-year ended 31 December 2016 (Unaudited) Half-year ended 31 December 2015 (Audited) Year ended 30 June 2016 Revenue return £’000 Capital return £’000 Total £’000 Revenue return £’000 Capital return £’000 Total £’000 Revenue return £’000 Capital return £’000 Total £’000
Gains/(losses) on investments held at fair value through profit or loss - 83,984 83,984
485 - (10,641) (10,641)
Income from investments held at fair value through profit or loss 24,411 - 24,411 23,269 - 23,269 60,219 - 60,219
Other interest receivable and similar income 165 - 165 91 - 91 216 - 216 -------- -------- -------- -------- -------- -------- -------- -------- -------- Gross revenue and capital gains 24,576 83,984 108,560 23,360 485 23,845 60,435 (10,641) 49,794
The columns of this statement headed "Total" represent the Company's Income Statement, prepared in accordance with FRS 104. The revenue and capital columns are supplementary to this and are published under guidance from the Association of Investment Companies.
The Company has no recognised gains or losses other than those disclosed in the Income Statement and Statement of Changes in Equity.
All items in the above statement derive from continuing operations. No operations were acquired or discontinued during the period.
The accompanying notes are an integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
Half-year ended 31 December 2016 (Unaudited) Called-up share capital £’000 Share premium account £’000 Capital redemption reserve £’000 Other capital reserves £’000 Revenue reserve £’000
At 1 July 2016 81,290 408,191 2,707 706,542 43,856 1,242,586 Net return on ordinary activities after taxation - - - 80,331 22,286 102,617 Issue of 11,325,000 new ordinary shares 2,831 41,805 - - - 44,636 Fourth interim dividend (4.05p per share) for year ended 30 June 2016 paid 31 August 2016 - - - - (13,177) (13,177) First interim dividend (4.05p per share) for year ended 30 June 2017 paid 30 November 2016 - - - - (13,354) (13,354) ----------- ------------ ----------- ------------ ----------- ------------- At 31 December 2016 84,121 449,996 2,707 786,873 39,611 1,363,308 ====== ======= ====== ======= ====== ======== Half-year ended 31 December 2015 (Unaudited) Called-up share capital £’000 Share premium account £’000 Capital redemption reserve £’000 Other capital reserves £’000 Revenue reserve £’000
At 1 July 2015 76,921 346,149 2,707 724,379 38,356 1,188,512 Net return on ordinary activities after taxation - - - (3,093) 21,207 18,114 Issue of 13,075,000 new ordinary shares 3,269 46,936 - - - 50,205 Fourth interim dividend (3.90p per share) for year ended 30 June 2015 paid 28 August 2015 - - - - (12,119) (12,119) First interim dividend (3.90p per share) for year ended 30 June 2016 paid 30 November 2015 - - - - (12,376) (12,376) Reclaimed dividends from previous years - - - - (12) (12) ----------- ------------ ----------- ------------ ----------- ------------- At 31 December 2015 80,190 393,085 2,707 721,286 35,056 1,232,324 ====== ======= ====== ======= ====== ======== Year ended 30 June 2016 (Audited) Called-up share capital £’000 Share premium account £’000 Capital redemption reserve £’000 Other capital reserves £’000 Revenue reserve £’000
At 1 July 2015 76,921 346,149 2,707 724,379 38,356 1,188,512 Net return on ordinary activities after taxation - - - (17,837) 55,676 37,839 Issue of 17,475,000 new ordinary shares 4,369 62,042 - - - 66,411 Fourth interim dividend (3.90p per share) for year ended 30 June 2015 paid 28 August 2015 - - - - (12,119) (12,119) First interim dividend (3.90p per share) for year ended 30 June 2016 paid 30 November 2015 - - - - (12,376) (12,376) Second interim dividend (3.90p per share) for year ended 30 June 2016 paid 29 February 2016 - - - - (12,560) (12,560) Third interim dividend (4.05p per share) for year ended 30 June 2016 paid 31 May 2016 - - - - (13,109) (13,109) Reclaimed dividends from previous years - - - - (12) (12) ----------- ------------ ----------- ------------ ----------- ------------- At 30 June 2016 81,290 408,191 2,707 706,542 43,856 1,242,586 ====== ======= ====== ======= ====== ========
The accompanying notes are an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
(Unaudited) 31 December 2016 £’000 (Unaudited) 31 December 2015 £’000 (Audited) 30 June 2016 £’000
Investments held at fair value through profit or loss (note 5) Listed at market value in the United Kingdom 1,273,736 1,212,546 1,172,910 Listed at market value overseas 181,096 140,633 168,509 Investment in subsidiary undertakings 347 347 347 ------------- ------------- ------------- 1,455,179 1,353,526 1,341,766 ------------- ------------- ------------- Current assets Debtors 4,483 4,165 9,429 --------- --------- --------- 4,483 4,165 9,429 --------- --------- --------- Creditors: amounts falling due within one year (20,338) (49,383) (32,610) ------------ ------------ ------------ Net current liabilities (15,855) (45,218) (23,181) ------------ ------------ ------------ Total assets less current liabilities 1,439,324 1,308,308 1,318,585
Creditors: amounts falling due after more than one year (76,016) (75,984) (75,999) ------------ ------------ ------------ Net assets 1,363,308 1,232,324 1,242,586 ======= ======= ======= Capital and reserves Called-up share capital (note 3) 84,121 80,190 81,290 Share premium account 449,996 393,085 408,191 Capital redemption reserve 2,707 2,707 2,707 Other capital reserves 786,873 721,286 706,542 Revenue reserve 39,611 35,056 43,856 ------------- ------------- ------------- Equity shareholders’ funds 1,363,308 1,232,324 1,242,586 ======= ======= =======
Net asset value per ordinary share - basic and diluted (note 4) 405.2p 384.2p 382.2p ====== ====== ======
The accompanying notes are an integral part of these financial statements.
NOTES 1. Accounting Policy – Basis of Preparation The condensed set of financial statements has been prepared in accordance with FRS 104, Interim Financial Reporting, issued in March 2015, the reporting standard for half-year reporting that accompanies FRS 102, the Financial Reporting Standard applicable in the UK and Republic of Ireland, which is effective for periods commencing on or after 1 January 2015, and the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts ('the SORP') issued by the Association of Investment Companies November 2014. The Company has early adopted the amendments to FRS 102 in respect of fair value hierarchy disclosures as published in March 2016.
The condensed set of financial statements has been neither audited nor reviewed by the Company’s auditors.
As an investment fund the Company has the option, which it has taken, not to present a cash flow statement. A cash flow statement is not required when an investment fund meets all the following conditions: substantially all of the entity's investments are highly liquid and are carried at market value; and where a statement of changes in equity is provided.
2. Return per Ordinary Share (Unaudited) Half-year ended 31 December 2016 £’000 (Unaudited) Half-year ended 31 December 2015 £’000 (Audited) Year ended 30 June 2016 £’000 The return per ordinary share is based on the following figures: Revenue return 22,286 21,207 55,676 Capital return 80,331 (3,093) (17,837) ---------- ---------- ---------- Total 102,617 18,114 37,839 ====== ====== ====== Weighted average number of ordinary shares in issue for each period 329,532,287 315,548,864 319,488,967
Revenue return per ordinary share 6.76p 6.72p 17.42p Capital return per ordinary share 24.38p (0.98p) (5.58p) ---------- ---------- ---------- Total return per ordinary share 31.14p 5.74p 11.84p ====== ====== ====== The Company does not have any dilutive securities, therefore, the basic and diluted returns per share are the same.
3. Share Capital During the half-year ended 31 December 2016, 11,325,000 ordinary shares were issued for total proceeds of £44,636,000 (31 December 2015: 13,075,000 ordinary shares issued for total proceeds of £50,205,000; 30 June 2016: 17,475,000 ordinary shares issued for total proceeds of £66,411,000). The number of ordinary shares in issue at 31 December 2016 was 336,484,868.
4. Net Asset Value per Ordinary Share The net asset value per ordinary share is based on the net assets attributable to the ordinary shares of £1,363,308,000 (31 December 2015: £1,232,324,000; 30 June 2016: £1,242,586,000) and on 336,484,868 ordinary shares (31 December 2015: 320,759,868; 30 June 2016: 325,159,868) being the number of ordinary shares at period end. 5. Financial instruments The financial assets and financial liabilities are either carried in the statement of financial position at their fair value or the statement of financial position amount is a reasonable approximation of fair value (debtors and creditors falling due within one year). The debenture stock, secured notes, preference stock and preferred ordinary stock are carried in the statement of financial position at par.
At 31 December 2016, the fair value of the debenture stocks was £91,910,000 (31 December 2015: £84,490,000; 30 June 2016: £84,870,000) and the aggregate fair value of the preferred and preference stock was £2,615,000 (31 December 2015: £2,813,000; 30 June 2016: £2,725,000). The valuations of the debenture stocks are obtained from brokers based on market prices. The valuations of the preferred and preference stock are from the Daily Official List quotations.
Since 30 September 2016, the 4.53% secured notes have been valued at fair value for the purpose of daily net asset value reporting. At 31 December 2016, the fair value of the secured notes was estimated to be £42,721,000. Under the previous valuation policy, the fair value of the secured notes as at 31 December 2015 and 30 June 2016 was deemed to be the par value of £35,000,000.
The debenture stock, preference stock and preferred ordinary stock are categorised as level 1 in the fair value hierarchy. The secured notes are categorised as level 3 in the fair value hierarchy.
The table below sets out fair value measurements of the investments using the FRS 102 fair value hierarchy. Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset as follows:
Level 1: valued using quoted prices in active markets for identical assets;
Level 2: valued by reference to valuation techniques using observable inputs other than quoted prices included in Level 1; and
Level 3: valued by reference to valuation techniques using inputs that are not based on observable market data. Financial assets at fair value through profit or loss at 31 December 2016 Level 1 Level 2 Level 3 Total £'000 £'000 £'000 £'000 Equity investments 1,454,832 - 347 1,455,179 Total financial assets carried at fair value 1,454,832 - 347 1,455,179
Financial assets at fair value through profit or loss at 31 December 2015 Level 1 Level 2 Level 3 Total £'000 £'000 £'000 £'000 Equity investments 1,353,179 - 347 1,353,526 Total financial assets carried at fair value 1,353,179 - 347 1,353,526
Financial assets at fair value through profit or loss at 30 June 2016 Level 1 Level 2 Level 3 Total £'000 £'000 £'000 £'000 Equity investments 1,341,419 - 347 1,341,766 Total financial assets carried at fair value 1,341,419 - 347 1,341,766
The investments that were previously reported as Level A and Level C in 2015 under the initial FRS 102 fair value hierarchy have been categorised as Level 1 and Level 3 respectively under the amendments to FRS 102 issued in March 2016 that were applied for the 30 June 2016 year end.
The valuation techniques used by the Company are explained in the accounting policies note 1 in the Company's Annual Report for the year ended 30 June 2016.
6. Transaction Costs Purchase transaction costs for the half-year ended 31 December 2016 were £319,000 (31 December 2015: £608,000; 30 June 2016: £873,000). These comprise mainly stamp duty and commissions. Sale transaction costs for the half-year ended 31 December 2016 were £34,000 (31 December 2015: £38,000; 30 June 2016: £84,000). 7. Dividends A first interim dividend of 4.05p was paid on 30 November 2016. The second interim dividend of 4.05p (declared on 14 December 2016) will be paid on 28 February 2017 to shareholders on the register on 27 January 2017. The Company's shares went ex-dividend on 26 January 2017. 8. Related Party Transactions Other than the relationship between the Company and its Directors, the provision of services by Henderson is the only related party arrangement currently in place. Other than fees payable by the Company in the ordinary course of business and the provision of marketing services, there have been no material transactions with this related party affecting the financial position of the Company during the period under review.
9. Going Concern The assets of the Company consist of securities that are readily realisable and, accordingly, the Directors believe that the Company has adequate resources to continue in operational existence for at least 12 months from the date of approval of the financial statements. Having assessed these factors and the principal risks, the Board has determined that it is appropriate for the financial statements to be prepared on a going concern basis.
10. Comparative information The financial information contained in this half-year report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The figures and financial information for the year ended 30 June 2016 are extracted from the latest published accounts and do not constitute the statutory accounts for that year. Those accounts have been delivered to the Registrar of Companies and included the Report of the Independent Auditors, which was unqualified and did not include a statement under either section 498(2) or 498(3) of the Companies Act 2006.
11. General Information
Company Status The City of London Investment Trust plc is a UK domiciled investment trust company.
The SEDOL/ISIN number is GB0001990497. The London Stock Exchange (TIDM) Code is CTY. Global Intermediary Identification Number (GIIN) is S55HF7.99999.SL.826. Legal Entity Identifier number (LEI) is 213800F3NOTF47H6AO55.
Company Registration Number UK: 00034871 New Zealand: 1215729
Registered Office UK: 201 Bishopsgate, London EC2M 3AE
Directors and Secretary The Directors of the Company are Philip Remnant CBE (Chairman), Samantha Wren (Audit Committee Chair), Simon Barratt (Senior Independent Director), David Brief and Martin Morgan.
The Corporate Secretary is Henderson Secretarial Services Limited, represented by Rachel Peat FCIS.
Website Details of the Company's share price and net asset value, together with general information about the Company, monthly fact sheets and data, copies of announcements, reports and details of general meetings can be found at http://www.cityinvestmenttrust.com
12 Half-Year Report An update, extracted from the Company's report for the half-year ended 31 December 2016, will be posted to shareholders in February 2017. Copies of the half-year announcement and the half-year update will be available on the website http://www.cityinvestmenttrust.com. Copies can also be requested thereafter from the Corporate Secretary at the Registered Office, 201 Bishopsgate, London EC2M 3AE.
Forty Largest Investments
Market value 31 December 2016 £'000 Company
Market value 31 December 2016 £'000 Royal Dutch Shell 73,517 Land Securities 19,430 British American Tobacco 65,867 Phoenix 19,286 HSBC 63,142 Rio Tinto 18,551 BP 43,464 Persimmon 17,532 Diageo 41,334 Schroders 17,069 Vodafone 38,506 Compass 16,907 Prudential 37,435 Sky 15,457 Unilever 31,186 Provident Financial 15,316 Lloyds Banking 31,157 Nestlé 14,751 GlaxoSmithKline 30,696 Croda International 14,535 RELX 29,911 Barclays 14,056 National Grid 29,232 British Land 13,690 SSE 26,845 Centrica 13,555 Verizon Communications 26,546 Segro 13,512 Imperial Brands 26,364 TUI 13,512 BAE Systems 23,114 Berkeley 13,387 BT 20,723 United Utilities 12,794 Taylor Wimpey 20,208 Standard Life 12,276 Reckitt Benckiser 20,195 Greene King 12,150 AstraZeneca 20,163 Pearson 12,111
These investments total £999,482,000 or 68.7% of the portfolio
Convertibles and all classes of equity in any one company are treated as one investment Sector exposure As a percentage of the investment portfolio excluding cash
% Financials 25.2 Consumer Goods 19.0 Consumer Services 13.6 Industrials 9.0 Oil & Gas 8.1 Utilities 7.3 Telecommunications 6.9 Health Care 6.1 Basic Materials 3.8 Technology 1.0 -------- Total 100.0 =====
For further information please contact:
Job Curtis Fund Manager The City of London Investment Trust plc Telephone: 020 7818 4367
James de Sausmarez Director and Head of Investment Trusts Henderson Investment Funds Limited Telephone: 020 7818 3349
Sarah Gibbons-Cook Investor Relations and PR Manager Henderson Investment Funds Limited Telephone: 020 7818 3198
Neither the contents of the Company’s website nor the contents of any website accessible from hyperlinks on the Company’s website (or any other website) is incorporated into, or forms part of, this announcement.
FY17 interim results: Investing in new infrastructure and capacity to improve the customer experience
Auckland Airport has today announced its financial results for the six months to 31 December 2016.
Auckland Airport Chair, Sir Henry van der Heyden, says, “The first half of the 2017 financial year saw a continuation of the very strong growth in tourism to New Zealand. In response to this growth we have continued to invest significantly in our infrastructure, technology and operations to improve both capacity and the quality of passenger journeys through Auckland Airport. We have also focused on land transport access to, from and around the airport to improve traffic flows and travel times for our customers.”
“The implementation of our 30-year vision to build the airport of the future is now well underway and we are currently investing more than $1 million every working day on our core airport infrastructure. This investment is spread across many projects, with over 42 capital expenditure projects currently underway that are each valued at more than $1 million.”
“This investment is essential given the substantial growth in the number of passengers and also the number of airlines servicing Auckland – the number of international airlines at Auckland Airport has increased by 50% in only 18 months. This growth is now flowing throughout New Zealand and it is important our tourism sector adjusts quickly to ensure our country can sustain the growth and maintain the quality of its tourism product. To that end we have continued to play an important sector leadership role to ensure there is sufficient capacity to allow tourism to continue to sustainably grow over the next decade.”
“Construction is well underway on Auckland Airport’s new international departure area and we will open a new and expanded security screening and processing area, as well as the first half of the new stores for our two anchor duty free operators, by the middle of this year. The remainder of the new duty free stores and the first half of the new passenger lounge will be opened by the end of December 2017 with the project due for completion by mid-2018. Construction on the international terminal’s Pier B extension is also well underway to provide additional gate lounges and airbridges to accommodate the increasing number of A380 and B787 aircraft using Auckland Airport. The first new gate lounge and airbridges ̶ Gate 17 ̶ will be opened prior to the 2017/18 summer peak season and the second gate lounge and airbridges ̶ Gate 18 ̶ will be completed by early-2018. This extension project will enable Pier B to accommodate four A380 or B787 aircraft at the same time. Alternatively, it could be used to accommodate eight smaller A320 international aircraft.”
“The strong and ongoing growth of Auckland is putting additional pressure on the city’s transport infrastructure. At the same time, New Zealand’s tourism industry is significantly exceeding growth forecasts made only a few years ago.”
“Given the importance of air connectivity for New Zealand’s travel, trade and tourism sectors, improving land transport access to Auckland Airport must remain a priority for central and local government transport agencies. We look forward to this year’s completion of the $1.4 billion Waterview Connection and the $146 million upgrade of the State Highway 20A/Kirkbride Road intersection ̶ both of which should improve travel times to the airport.”
“Auckland Airport will continue to advocate for additional transport improvements, in particular an upgrade to State Highway 20B/Puhinui Road and improved public transport services. We are working closely with the New Zealand Transport Agency and Auckland Transport to advance both short and longer-term transport solutions for South Auckland and the airport precinct.”
“Auckland Airport has also fast-tracked a number of planned roading and transport upgrades on our own network.”
Already in the first half of the 2017 financial year, we have: • upgraded the Puhinui Road roundabout to help improve the eastern access to the airport from State Highway 20B/Puhinui Road; • added 1,400 more car parks to our Park&Ride facility, mostly for use by staff working at the international terminal to remove staff traffic from the inner airport roads; • upgraded the traffic light phasing and lane configurations at the airport’s George Bolt Memorial Drive and Tom Pearce Drive intersection to improve traffic flows; • updated the lane configurations at the airport’s George Bolt Memorial Drive and Laurence Stevens Drive roundabout to improve traffic flows; and • developed new traffic management plans for use when the airport roading network is particularly busy.
“Looking ahead, Auckland Airport has an ongoing programme to upgrade both its aeronautical and transport infrastructure and is currently consulting with its airline partners on that programme and the setting of aeronautical prices for the 2018 ̶ 2022 financial years. This process is well underway and we will be announcing the revised pricing and infrastructure programme in the middle of this year once the consultation process has been completed.”
In the six months to 31 December 2016 the total number of passengers using our airport increased by 12.4% to 9.4 million. Domestic passengers were up 11.7% to 4.3 million, international passengers (excluding transit passengers) were up 11.9% to 4.8 million and international transit passengers were up 28.6% to 353,978.
Revenue was up 10.8% to $310.9 million, while expenses were up 11.8% to $75 million. Earnings before interest expense, taxation, depreciation, fair value adjustments and investments in associates (EBITDAFI) increased 10.5% to $235.9 million. Total profit after tax was up 22.5% to $141.8 million, while underlying profit was up 18.6% to $123.5 million. As a result, our underlying earnings per share is up 18.6% to 10.4 cents and our interim dividend for the 2017 financial year is up 17.6% to 10 cents per share.
“Revenue growth was, in part, due to ongoing strong growth in aeronautical and investment property revenues, while the increase in expenses was, in part due to new airline and route marketing, operational resources and asset management and maintenance.”
Our total share of the underlying profit from associates was $7.6 million for the first six months of the 2017 financial year, up 11.8%. The underlying profit share from Queenstown Airport remained at $1.5 million and the share from the Novotel hotel, in which we increased our shareholding to 50% after balance date, was up 25% to $1 million. Our underlying profit share from North Queensland Airports was up 13.3% to $5.1 million.
“Auckland Airport has a long-term growth strategy and in the first six months of the 2017 financial year we commenced a review of our 24.55% investment in North Queensland Airports. While we believe North Queensland Airports is a highly attractive asset, the review will ensure that our asset portfolio continues to match our strategic objectives.”
The interim dividend for the six months to 31 December 2016 is imputed at the company tax rate of 28% and will be paid on 4 April 2017 to shareholders who are on the register at the close of business on 21 March 2017. “The Board has also elected to reinstate our dividend reinvestment plan to provide funding flexibility to support our investment in new infrastructure and growth opportunities,” says Sir Henry.
“Reflecting the overall investment in infrastructure spend this financial year, we are lifting our capital expenditure guidance for the 2017 financial year to between $370 million and $400 million. At the beginning of the 2017 financial year, we outlined our expectation that net profit after tax (excluding any fair value changes and other one-off items) would be between $230 million and $240 million. In consideration of our financial performance in the first half of the 2017 financial year, Auckland Airport is now tightening its guidance for the full year to be between $235 million and $243 million, which would deliver an increase in underlying earnings per share of between 10.5% and 14.2% compared with 2016.”
“This updated guidance is subject to any material adverse events, significant one-off expenses, non-cash fair value changes to property, and deterioration as a result of global market conditions or other unforeseeable circumstances,” says Sir Henry.
8:53am, 17 Feb 2017 | HALFYR Steel & Tube chief executive Dave Taylor said profit for the half was consistent with expectation.
“This is against a volatile global steel and intensely competitive domestic trading landscape.
Even though residential construction activity improved, non-residential construction by floor area dropped by 20 per cent during the year ending December 2016, contributing to domestic steel volumes remaining some 13 to 15 per cent below the peaks experienced in the 2004/5.
While Steel & Tube maintained its price leadership position, others favoured volumes over price management.”
“In terms of the performance of acquisitions, S&T Stainless and MSL are performing well, while S&T Plastics took the opportunity to prepare the plant and increase capabilities in advance of several contract commitments worth in excess of $27 million for calendar year 2017. This impacted profitability by $1.2 million after tax. Our newest addition to the Steel & Tube stable, Composite Floor Decks Limited (CFDL) which was acquired at the end of October had two strong trading months.”
“We continue to drive to modernise the business in terms of facilities, equipment, systems, and these activities are ongoing, ensuring we continue to deliver products most cost effectively and efficiently and with a continued focus on a united approach to customers. The first stage of the systems alignment has been completed, and that has enabled some costs to be removed, with more alignment to come over the coming years. We expect the second half will be stronger than the first half reflecting the pricing opportunity. In addition, contracts recently awarded to S&T Plastics, the benefits of cost reductions and CFDL performance through the next six months will deliver improved earnings, said Mr Taylor.”
For further information please contact:
Tanya Katterns Communications Manager 04 570 5048
Note for editors:
Steel & Tube is New Zealand’s leading provider of steel solutions and a proud New Zealand company with over 60 years of trading history in this country. With a national network of branches and distribution centres, S&T engages in markets and projects across infrastructure, construction (commercial and residential), heavy and light engineering, energy, manufacturing, viticulture and rural sectors. The company distributes and manufactures steel products – from nuts, bolts, nails, piping, roofing and farm fencing, to the largest structural steel products used in commercial construction, such as purlins, girts, joists, universal beams and seismic mesh. S&T’s stable of best-in-class businesses are leading suppliers of stainless, engineering steel, fastenings, and irrigation products and services in the country. They include S&T Stainless, Manufacturing Suppliers Ltd (MSL), S&T Plastics and Composite Floor Decks Limited (CFDL). More information is available on S&T’s website: www.steelandtube.co.nz and www.stainless.steelandtube.co.nz
8:35am, 20 Feb 2017 | HALFYR STOCK EXCHANGE ANNOUNCEMENT
20 February 2017
Chorus 2017 half year result, report & updated guidance
The following are attached in relation to Chorus’ half year result and report for the period to 31 December 2016:
1. Media Release 2. Investor Presentation (including updated FY17 guidance) 3. Half Year Report (including financial statements and auditor review report) 4. NZX Appendix 1 5. NZX Appendix 7 6. Letter to investors
Chief Executive Officer Mark Ratcliffe, and Chief Financial Officer Andrew Carroll, will discuss the half year result by webcast at 10.00am New Zealand time today. The webcast will be available at http://www.chorus.co.nz/webcast.
For further information:
Nathan Beaumont Media and PR Manager Phone: +64 4 896 4352 Mobile: +64 (21) 243 8412 Email: [email protected]
4:27pm, 20 Feb 2017 | HALFYR Barramundi Limited Results for announcement to the market Reporting period 6 months to 31 December 2016 Previous reporting period 6 months to 31 December 2015
The interim financial statements attached to this report have been reviewed by PricewaterhouseCoopers and are not subject to a qualification. A copy of the independent review report applicable to the financial statements is attached to this announcement.
Current period NZ$000; up/(down)% Previous reporting period NZ$000 Total net income from ordinary activities 2,674; (59.2%), 6,560; Profit from ordinary activities after tax attributable to security holders 1,113; (75.1%), 4,467; Net profit attributable to security holders 1,113; (75.1%), 4,467;
Dividend Barramundi will pay a partially imputed dividend of 1.30cps as part of its quarterly distribution policy. Ex-dividend date 15 March 2017 Record date 16 March 2017 Dividend payment date 31 March 2017
Net asset value per share 31 December 2016 $0.65
For immediate release:
20 February 2017
Positive result for Barramundi shareholders
• Interim 2017 net operating profit $1.1m (interim 2016 net profit $4.5m) • Total shareholder return¹ +8.6% • Adjusted net asset value¹ per share +1.1% • 2.79 cents per share in dividends paid during the period
NZX-listed investment company Barramundi Limited (NZX: BRM) announced today a net operating profit after tax of $1.1m for the six month period ended 31 December 2016 (1H16: $4.5m). The Barramundi portfolio achieved a return² of +2.7% for the six months to 31 December 2016, lagging the benchmark³ which was up +10.6% over the period. The six months to 31 December 2016 saw a positive result for shareholders despite the portfolio’s limited exposure to the mining and financial sectors that proved popular during the period.
In accordance with the company’s distribution policy (2.0% of average NAV per quarter), a total of 2.79 cents per share was paid to Barramundi shareholders during the six months ended December 2016. On 20 February 2017, the Board declared a dividend of 1.30 cents per share to be paid to shareholders on 31 March 2017 with a record date of 16 March 2017.
On 8 November 2016, the Barramundi Board announced it would undertake a pro-rata warrant issue as part of its capital management programme following the previous well supported warrant exercise in 2015. Shareholders were issued one warrant for every four shares held on 21 November 2016. The warrants give holders the right, but not the obligation, to purchase additional Barramundi shares on 24 November 2017 at an exercise price of $0.63 adjusted down for dividends declared during the period up to the exercise date. The final exercise price will be announced and an exercise form provided as soon as reasonably practicable after 29 September 2017.
Barramundi’s Chairman, Alistair Ryan, said: “The Board is pleased at the Manager’s continued focus on investing in quality companies. The Barramundi portfolio aims to deliver good returns over the medium to long term, regardless of short term changes in the markets moods and preferences, such as those experienced in the interim period.”
Portfolio Manager, Manuel Greenland, said: “Our response to changing global dynamics, and domestic investor preferences, is straightforward; we will take advantage of weakness in the share prices of our preferred businesses to own more of them. Long-term investment success demands the discipline to stick to a proven strategy even when it is temporarily out of favour, and the balance to sensibly diversify risk at challenging moments. Our focus remains on growing the value of the Barramundi portfolio by investing in strong companies that will succeed over time.”
¹The total shareholder return and adjusted net asset value methodologies are described in the Barramundi Non-GAAP Financial Information policy. A copy of the policy is available at http://www.barramundi.co.nz/about-barra ... -policies/ ²Gross of fees and tax and adjusting for capital management initiatives ³Benchmark index: S&P/ASX 200 Index (hedged 70% to NZD)
About Barramundi Barramundi is a listed investment company that invests in growing Australian companies. The Barramundi portfolio is managed by Fisher Funds, a specialist fund manager with a track record of successfully investing in growth company shares. The aim of Barramundi is to offer investors competitive returns through capital growth and dividends, and access to a diversified portfolio of investments through a single, tax-efficient investment vehicle. Barramundi listed on the NZX Main Board on 26 October 2006 and may invest in companies listed on the Australian Securities Exchange (with a primary focus on those outside the top 20 at the time of investment) or unlisted companies. /ends