ALE Property Group has booked a 24.6% gain distributable profit from $11.7 million in 2005 to $14.6 million for the year ended June 30, 2006.
ALE’s managing director Andrew Wilkinson said ALE has delivered another strong year of growth. Distributions have increased 25% above 2005 levels.
“In addition to the borrowing cost savings achieved through a major refinancing, our management expense ratio of 0.24% of total assets is one of the lowest in the LPT sector. This is a tremendous achievement given ALE’s relative size,” he added.
Over the year, ALE’s revenue edged up slightly by $1.6 million from $47.2 million to $48.8 million with property income contributing $47.6 million up by 3.5%.
ALE’s AIFRS adjusted net profit for the year was $52.2 million, with revaluations gains contributing $50.3 million.
As at June 30, 2006, ALE’s total portfolio is valued at $717.6 million – an increase of $50.3 million or 7.7% over the June 2005 figure. The portfolio revaluations show an improvement in the average portfolio capitalisation rate to 6.57%.
Meanwhile, ALE’s gearing was 68.2%, which compares with 88.6% at IPO and 71.5% at June 30, 2005.
Wilkinson said that whilst ALE is in an excellent position to make value accretive acquisitions, management and the board will continue to be patient and disciplined to ensure that the quality of its property holdings are maintained.
Wilkinson said the outlook for the year to June 2007 is positive with current expectations for a CPI increase of between 3.5% and 4% for the year ending September 2006.
“Interest savings achieved through the refinancing will continue to have a positive impact on future earnings. Management will continue to work to identify opportunities where interest hedging and savings may be achieved.
“In terms of acquisitions, ALE remains focused on property with long term secure leases both in the pub and other commercial property sectors. ALE will continue to pursue value accretive opportunities,” he added.
Wilkinson said given ALE’s current interest rate hedging and gearing position, inflation indexed increases in property rentals substantially flow through to stapled security holders as a multiple of inflation.
In the 2006 financial year, ALE increased distributions per security to 16.00 cents in the current year, growth of 24.5% over 12.85 cents in FY05.
Wilkinson said that the distribution was also above the guidance of at least 13.80 cents per stapled security provided in February 2006 and pays out 99.7% of all distributable net operating cash flow generated during the year.
By Kathryn O’Meara
