This article is from the Australian Property Journal archive
PRUDENT financial management and the acquisition of a Brisbane industrial asset helped Desane through the early stages of the COVID period, and the group plans to utilise its strong balance sheet and cash reserves in enhancing its logistics properties.
Desane achieved a statutory net profit after tax of $2.3 million for FY20. A drop in full year EBIT, to $3.4 million from $39.2 million, was the result of the sale of its controversial Rozelle asset during the previous year.
Total group assets stand at $82.5 million. The final dividend of 2.25 cents per share took the full year dividend to 4.5 cps, unfranked.
Desane bought a 21,750 sqm facility Wacol during the period, leased to the Brisbane City Council, and combined with Desane’s two existing industrial property assets in Sydney, is generating a combined average return of 7% each year.
The group said it has a focus on adding value to its existing industrial portfolio. After the close of the financial year, Desane lodged a development application with Brisbane City Council to expand the Wacol asset by adding 3,250 sqm of net lettable floor space to the existing 5,039 sqm facility.
“The acquisition of the Brisbane industrial asset, together with diligent management of the group’s expenditure, has meant that Desane has been able to weather well the first phase of COVID‐19’s economic impact,” Desane’s chief executive officer and managing director, Phil Montrone said.
“The COVID‐19 pandemic has pushed consumers to change the way they spend and has accelerated Australia’s e‐commerce market resulting in a healthy demand for properties that offer warehousing, logistics and distribution facilities.
“Desane’s investment assets fall into the highly sought after industrial asset class, providing stability of income during these challenging times.”
The group has $19 million in cash and financial assets, a $9 million financial asset pool yielding an average of 7% per annum interest revenue, and a liquid debt position at $4.3 million.
“Our company’s strong balance sheet, coupled with the availability of substantial cash reserves, will deliver the group the ability to acquire additional income producing industrial assets,” Montrone said.
Desane’s obtained approval for a 46 residential apartment project located in Leichhardt, and acquired another DA approved boutique development in the inner western suburb. It also holds a 1.2 hectare asset in Penrith.
