Financial results
For the year ended 31 March 2024
28 May 2024
6-8 MUNROE LANE AUCKLAND
OVERVIEW
- Result summary
- Key metrics
- Activity during the year
- Financial performance
- Funding update
- Portfolio update
- Outlook
Result summary
- Total loss for the year net of tax of $5.30m (FY23 loss of $13.05m).
- Result impacted by $4.90m of revaluation losses ($12.69m of losses in FY23).
- AFFO1 loss of $0.67m ($0.28m loss in FY23).
- Net rental income of $3.65m, up$0.18m on the previous year, primarily due to the commencement of Munroe Lane rent offset against the Stoddard Road divestment.
- Munroe Lane development complete with Auckland Council rental commencing on 17 May 2023.
1. AFFO stands for 'Adjusted Funds From Operations', and is non-GAAP financial information, calculated based on guidance issued by the Property Council of Australia. Asset Plus considers that AFFO is a useful measure for shareholders and management because it assists in assessing the Company's underlying operating performance. This non-GAAP financial information does not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information prescribed by other entities. The calculation of AFFO has been reviewed by Asset Plus' auditor, Grant Thornton New Zealand Audit Limited. A reconciliation of AFFO is set out in Appendix 1.
Key metrics
Portfolio value | Properties* | Occupancy* | WALE* | Loan-to-value | Net tangible |
ratio* | assets | ||||
March 2024 | |||||
$180.8m | 2* | 41.0% | 5.9 years | 18.2% | 38.9 cps |
March 2023 | |||||
$216.6m | 3* | 37.0% | 1.2 years | 31.5% | 40.4 cps |
((( |
*35 Graham Street is unconditionally sold with a deferred settlement but is represented in the metrics above. | Asset Plus |
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Activity during the year
Munroe Lane development complete,
with Auckland Council rental commencing on
17 May 2023.
35 Graham Street settlement deferred to 29
November 2024.
Stoddard sold and settled on 1 May 2023.
6-8 MUNROE LANE
Financial performance
Financial Performance
Mar-24 | Mar-23 | Var | ||
($m) | ($m) | ($) | ||
Gross Rental Revenue | 5.33 | 6.38 | (1.05) | |
Direct Property Operating Expenses | (1.68) | (2.91) | 1.23 | |
Net Rental Revenue | 3.65 | 3.47 | 0.18 | |
Administration Expenses | (1.75) | (1.94) | 0.19 | |
Net Finance Costs | (2.30) | (2.00) | (0.30) | |
Total Operating Loss | (0.40) | (0.47) | 0.07 | |
Fair Value Movement on Investment | (4.90) | (13.04) | 8.14 | |
Properties including disposal | ||||
Loss Before Taxation | (5.30) | (13.51) | 8.21 | |
Tax Benefit | - | 0.46 | (0.46) | |
Total Comprehensive Loss for the Period | (5.30) | (13.05) | 7.75 | |
AFFO | (0.67) | (0.28) | ||
AFFO CPS | (0.19) | (0.07) | ||
- The impact of the Eastgate and Stoddard Road settlements reduced net rental income by $3.84 million.
- The impact of the above divestments was however offset by the Munroe Lane net rental income of $4.0 million which was recognised for the year (noting rental commenced on 17 May 2023). Overall, net rental income increased by $0.18 million.
- Management fees were marginally lower by $0.14 million due to the impact of the Eastgate and Stoddard Road divestments offset by the Munroe Lane development and a small performance fee ($0.06 million).
- Net finance costs were higher by $0.30 million primarily due to higher average interest rates ($0.57 million) offset against higher interest income ($0.28 million).
- The Munroe Lane unrealised revaluation loss recognised was $8.0 million as the cap rate softened from 6.05% to 6.25% as well as increased let up periods and incentives assumed.
- The 35 Graham Street fair value increased by $3.0 million due to the discount unwind.
- There are tax losses of ~$12 million. A deferred tax asset recognised to the extent of the deferred tax liability, hence $8.9 million of tax losses are not recognised as a deferred tax asset.
- AFFO reconciliation and waterfall is appended.
Asset Plus
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Net Rental Performance
Mar-24 | Mar-23 | Var ($) | |
($m) | ($m) | ||
Stoddard Road | 0.20 | 2.62 | (2.42) |
35 Graham Street | (0.55) | (0.51) | (0.04) |
Eastgate | - | 1.42 | (1.42) |
Munroe Lane | 4.00 | (0.06) | 4.06 |
Current portfolio | 3.65 | 3.47 | 0.18 |
- 35 Graham Street was broadly in line with the prior period. It remains 99% vacant. A small amount of carpark income was received which partially offset the opex incurred.
- The Eastgate settlement occurred in late August 2022, which was the key reason for the reduction in net rental income of $1.42 million at Eastgate.
- The Stoddard Road settlement occurred on 1 May 2023, which was the sole reason for the reduction in net rental income of $2.42 million.
- Munroe Lane rent commenced on 17 May 2023 in respect to the Auckland Council lease. Net rental (including unrecovered opex on the vacancy) of $4.0 million was derived during the period.
Asset Plus
8
Administration & Finance Expenses
Mar-24 | Mar-23 | Var ($) | ||
($m) | ($m) | |||
Management Fees | 0.99 | 1.13 | 0.14 | |
Directors' Fees | 0.30 | 0.30 | - | |
Audit Fees | 0.10 | 0.10 | - | |
Professional Fees | 0.15 | 0.23 | 0.08 | |
Other Administration Costs | 0.21 | 0.18 | (0.03) | |
Total Administration Expenses | 1.75 | 1.94 | 0.19 | |
Interest & Finance Costs | 2.81 | 2.24 | (0.57) | |
Interest Revenue | (0.51) | (0.24) | 0.27 | |
Total Net Finance Costs | 2.30 | 2.00 | (0.30) | |
- Management fees were slightly lower as the weighted average portfolio value marginally decreased due to the divestments, offset by the Munroe Lane development.
- Management fees also included a small performance fee of $0.06 million for the year.
- Finance costs increased by $0.57 million. This was primarily due to higher average interest rates ($0.72 million) offset against a lower average debt balance which represented a saving of $0.15 million.
- Interest income was higher by $0.27 million due to funds held in the lockbox (from November 2022) as well as the Munroe Lane retention funds held in trust, and higher effective deposit rates achieved.
- The development facility converted to an investment facility on 13 July 2023. Up until that date finance costs on this facility were capitalised.
Asset Plus
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Balance Sheet
Mar-24 | Mar-23 | Var | ||
($m) | ($m) | ($) | ||
Cash | 3.7 | 4.9 | (1.2) | |
Investment Property | 116.1 | 118.6 | (2.5) | |
Properties Held For Sale | 64.7 | 98.0 | (33.3) | |
Other Assets | 5.8 | 8.0 | (2.2) | |
Total Assets | 190.3 | 229.5 | (39.2) | |
Bank Debt | 33.0 | 71.4 | (38.4) | |
Other Liabilities | 16.1 | 11.6 | 4.5 | |
Total Liabilities | 49.1 | 83.0 | (33.9) | |
Equity | 141.2 | 146.5 | (5.3) | |
Net Tangible Assets Per Share ($) | 0.389 | 0.404 | (0.015) | |
LVR Ratio | 18.2% | 31.5% | ||
- Investment property comprises just Munroe Lane ($116.05 million).
- 35 Graham Street is held for sale. During the year Stoddard Road was sold for $36.75 million.
- 35 Graham St fair value of $64.7 million reflects the future settlement proceeds on a discounted basis (applying a 9.0% discount rate which has increased from 8.5% during the year).
- Other assets include a $4 million cash lockbox held by BNZ and funds held in retention.
- Deposits received of $13.6 million in respect to the 35 Graham Street deferred settlement (recognised under other liabilities).
- $45.5 million of bank debt was repaid during the year.
- $7.1 million of debt was also drawn down progressively during the year to fund the completion of the Munroe Lane development.
- Net deferred tax is $nil, whereby the deferred tax asset is equivalent to the deferred tax liability of $0.87 million.
- Further tax losses not represented as a deferred tax asset are $8.9 million as they are not expected to be utilised in the near to medium term.
- NTA marginally reduced during the period to 38.9 cents per share due to revaluation losses.
- LVR is 18.2% at balance date (down from 31.5% as at 31 March 2023).
Asset Plus
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