KPG - Kiwi Property Group Limited

[Rawz]

Engine room of the economy …..fact or fallacy?

Not much real stuff actually made / produced in Auckland ….lot of burger flippers and baristas and they mainly do that for the locals …unproductive locals who spend a lot of the day in traffic jams.

I’m sure the primary sector would say they were the engine room of the economy

But then again I’m not an Aucklander

Common mate without Auckland and all our tax receipts all your roads would have pot holes in them and you would be experiencing power cuts on and off.

Does the south island have internet down there yet? Someone send them a fax with the wifi password

[LaserEyeKiwi]

Excellent result:

KPG reports 164% profit growth, delivers on strategy


22/11/2021, 8:30 am
• Net profit after tax: $143.2m (+164.1% on the prior comparable period (pcp))
• Investment property fair value movement: +$93.6m (+2.8%)
• Net tangible assets per share: $1.42 (+6 cents per share (cps))
• Net rental income: $94.0m (+11.5% on pcp)
• Operating profit before tax [Note 1]: $62.5m (+8.0% on pcp)
• Adjusted funds from operations [Note 1]: 3.06cps (+31.6% on pcp)
• Gearing: 30.7% (FY21 31.2%)
• Interim dividend: 2.75cps

Kiwi Property today announced a robust financial result for the six months ended 30 September 2021, reporting an uplift in all key operating metrics on the prior comparable period, including growth in income, profitability, asset values and interim dividend, despite the impact of COVID-19.

Net profit after tax was $143.2 million, up 164.1% on the same time last year, underpinned by a $93.6 million increase in the fair value of the company’s investment properties. Operating profit before tax rose 8.0% to $62.5 million, driven by an increase in net rental income, which grew 11.5% to $94.0 million.

Kiwi Property’s mixed-use, office and other properties were worth $3.5 billion as at 30 September 2021, up 2.8%, highlighting the strength of the company’s portfolio. Office was once again the highest performing of the asset classes recording a fair value gain of 4.9% to $1.1 billion. Kiwi Property’s mixed-use portfolio, including Sylvia Park, LynnMall and The Base, also experienced a valuation uplift, climbing 2.5% to $1.7 billion.

Kiwi Property Chief Executive Officer, Clive Mackenzie said the company’s solid half-year performance was particularly pleasing given the financial headwinds caused by the pandemic.

“Kiwi Property’s financial position and diversified property portfolio have remained resilient, despite the impact of COVID-19. The opening of the Sylvia Park Level 1 expansion had a positive impact on sales, driving increases in both income and operating profit. We’re operating in a challenging market and the full financial impact of recent lockdowns won’t be known until the second half of our financial year. We enter that period in good shape though, well placed to tackle whatever comes next.”

Resilient tenant portfolio

Recent COVID-19 lockdowns have placed a number of businesses under significant pressure. Kiwi Property is committed to sharing a fair proportion of the financial impact of the pandemic and supporting its small and medium sized tenants, in particular, to successfully navigate the pandemic. A $7.4 million rent relief provision was recorded in the first half of the financial year and a similar cost is expected for the second half [Note 2].

Kiwi Property’s customer-centric approach has enabled the company to minimise vacancy, maintain productive shopping centres, and helped safeguard the long-term performance of the company’s assets. At the half-year, Kiwi Property’s assets were 99.8% occupied, with a robust weighted average lease expiry of 5.2 years and rental growth of approximately 3.0%.

Delivering on strategy

“Over the past six months we’ve made significant progress on our mixed-use ambition; breaking ground on new developments, launching a new asset class and identifying new funding streams,” said Mackenzie.

“Despite the volatile macro-economic climate, our evolution into a creator of integrated retail, office and residential communities has more momentum than ever,” he added.

Build-to-rent

Kiwi Property has begun construction of New Zealand’s first major build-to-rent development, marking an important milestone in the delivery of the company’s mixed-use strategy. The $221 million, 295 apartment complex will be located at Sylvia Park in Auckland, accelerating the site’s evolution into an integrated retail, office and residential community. The development has a target stabilised net yield of approximately 4.5% and 10 year property internal rate of return of over 8.0%.

“Build-to-rent is poised to become an important part of our portfolio, further diversifying our asset base, unlocking growth and promoting valuation uplift. With our large mixed-use landholdings, including Sylvia Park and LynnMall, we’re in a unique position to deliver build-to-rent at scale in this country. Based on current plans, more than 1,200 residential apartments could potentially be added to Sylvia Park in the next decade,” said Mackenzie.

LynnMall

Resource consent has been obtained for a 25 level mixed-use development at LynnMall, which will integrate a compelling combination of ground floor retail, three commercial office levels and a 19 floor build-to-rent tower.

Located on LynnMall’s south west corner, the proposed mixed-use development is expected to become the tallest structure in west Auckland, making it a distinctive and iconic landmark. Construction of the development could begin as early as 2022, pending funding and approval.

Sustainability

Kiwi Property continues to make substantive progress on its sustainability journey, with the Global Real Estate Benchmark (GRESB) awarding the company a score of 80 (out of 100) for its Environmental, Social and Governance (ESG) performance in 2021, a strong result for a first time participant. This achievement places Kiwi Property among an impressive group of real estate organisations and sets a solid platform for further progress.

In addition, the company has supported Waikato-Tainui and the Waikato District Health Board to establish the region’s largest vaccination centre at Te Awa, The Base. More than 50,000 vaccinations have been administered at the facility since it opened in July.

Dividend and outlook

Kiwi Property will pay an interim dividend of 2.75 cents per share for the period ended 30 September 2021. Despite the expected cost of COVID-19 rental abatements, the company continues to target a total dividend of no less than 5.30 cps [Note 3] for the 2022 financial year, up from 5.15 cps the year before.

Outlook

Kiwi Property Chair, Mark Ford said “Kiwi Property took a number of important steps forward in the delivery of its strategy over the past six months. Our priority is to maintain this pace of execution, while continuing to unlock additional growth and development opportunities. COVID-19 will invariably cause challenges in the months ahead, but we will tackle them head-on, as we continue striving to create long-term value for our shareholders and other stakeholders.”

[winner69]

Excellent result:

Hope it does something to the share price eh

NTA up 6 cents to $1.42 ….suppose that’s good

[SPC]

Beagle put that bone down and pay attention!

[LaserEyeKiwi]

EPS for the 6 months was 9.12cps.

[winner69]

EPS for the 6 months was 9.12cps.

And 5.76cps of that were property revaluations

[winner69]

Often when starting to look through Annual and Interim Reports I look at the photos of the top brass and say to myself ‘would I trust these guys looking after my money’

Didn’t get very far into the latest KPG report

ps: at least Chair had a tie on

[NZSilver]

Pretty good result, improvement on operating profit including impairment for rent abatement. I like the projects they have planned whihc will boost earning and therefore div long-term. Probably will get a little boost in shareprice but I doubt it will be much. Just steady as she goes

[Beagle]

Often when starting to look through PayPal Annual and Interim Reports I look at the photos of the top brass and say to myself ‘would I trust these guys looking after my money’

Didn’t get very far into the latest KPG report

ps: at least Chair had a tie on

I thought the numbers are pretty lame. Better off swimming with the tide than against it http://nzx-prod-s7fsd7f98s.s3-websit...671/359011.pdf

[LaserEyeKiwi]

I thought the numbers are pretty lame. Better off swimming with the tide than against it http://nzx-prod-s7fsd7f98s.s3-websit...671/359011.pdf

Why would anyone pay well over twice the share price for the same dividend payout per share?

KPG paying 2.75cps interim dividend - KPG is $1.14 share price
GMT paying 2.75cps interim dividend - GMT is $2.49 share price

That’s a horrible value and dividend yield on GMT.

Also GMT is trading at 100% its NTA value, while KPG trades at a 25% discount currently.