This article is from the Australian Property Journal archive
ALE Property Group has achieved a 13.4% increase in distributable profit to $38.1 million for year ended June 30, despite recording a fall in rental income following the sales of 17 hotels.
ALE’s total revenue also jumped 12.5% to $64.6 million and will pay a FY10 distribution of 24.00 cps, in line with board guidance. This is despite ALE offloading 17 properties generating $107.3 million.
ALE’s portfolio now includes 87 properties which were revalued at $713.85 million, down 0.65%. During the period, ALE also raised $125 million and combined with the asset sales, that reduced gearing levels from 68.3% to 52.1%.
Net debt fell to $386 million from $547 million. Net assets per security at $2.14 (excluding derivative net assets) (FY09: $2.80).
Managing director Andrew Wilkinson said improvements in the credit markets and its relatively stable valuation performance through the cycle have allowed the board to form a view that net gearing at around 55% is currently acceptable.
He added that ALE will continue to work with its advisers and financiers to deliver a competitive refinancing outcome during FY11. The group is expected to provide a profit guidance for FY11 on completion of the refinancing.
Wilkinson said with expectation that the $126 million of Capital Indexed Bonds will remain in place, a refinancing of around $190 million of senior secured debt would be required.
That is expected to be completed before the scheduled debt maturities of May and September 2011. The new senior debt would fund up to around 35% net gearing.
“ALE decided on a capital management strategy and implementation program around a year ago. While we can now look back and acknowledge that some important milestones have been passed, we do so knowing that the completion of the refinancing task remains a high priority over the remainder of FY11.
“The capital management plan and completion of the refinancing are expected to result in ALE being well placed to continue to consider acquisitions that are strategically sensible as well as value accretive,” he concluded.
ALE share price was unchanged yesterday at $2.03.
Australian Property Journal
