CHARTER HALL believes its low gearing of 29% is positioning the group to pounce on opportunities created by the market volatility.
Yesterday, Charter Hall delivered a net profit after tax of $24.71 million for the six months ended December 2007 – up 57% from $15.74 million in December 2006.
The group’s NPAT after fair value adjustments was $46.48 million, up 186% compared to $16.25 million last year.
The group has announced a distribution of 6.30 cents per stapled security, which is 32% higher than the previous corresponding period. DPS is fully supported by underlying EPS of 6.32 cents.
Charter Hall’s joint managing directors David Southon and David Harrison said the group continues to deliver out-performance well above targeted hurdle rate benchmarks in all managed funds.
“This out-performance increases performance fee potential and traction in securing further equity commitments across various un-listed managed funds,” they said.
During the period, the group’s funds under management grew to $3.7 billion, from $2.1 billion at December 2006.
Importantly, committed equity yet to be drawn and allocated within unlisted managed funds provides further asset under management capacity of approximately $1.3 billion.
As at December 2007, the audited balance sheet gearing was 29% with “look through” gearing at 40%. The group’s debt facility has a duration of 2.5 years, unless extended further.
Net tangible assets per security have increased from $1.12 at 30 June 2007 to $1.18 as at 31 December 2007.
Looking ahead, Southon said the group has significant scope within off balance sheet managed funds to utilise committed equity and debt facilities to fund asset growth and portfolio diversification whilst pursuing its co-investment strategy in existing and new unlisted funds.
“Market volatility will potentially create opportunities for the Charter Hall Group and its managed funds, which are substantially capitalised with equity commitments from large wholesale investors.
“The group intends to capitalise on such opportunities using its experience in the opportunistic and value add space to exploit attractive asset pricing that may emerge for property with higher risks, i.e. development sites or low WALE investment properties.” he added.
“We believe the Charter Hall development and value add expertise and stable executive team provides potential to create further value within our property portfolios, a feature of the Group’s track record since 1991.
“We further expect the polarisation of debt markets will create a tighter buyer market for development and value add assets as financiers become more selective with their clients,”
Charter Hall shares closed 4 cents higher at $1.54.
Australian Property Journal
