This article is from the Australian Property Journal archive
ABACUS Property Group is looking to raise $187 million after delivering a 26% decline in first half year profits.
In the six months to December 31 2008, Abacus $35.6 million net profit for the half-year ended December 31 2008 down from $48.17 million in the same period last year.
Distribution per security was 3.50 cps.
The group delivered a statutory net loss of $51.69 million compared to a net profit after tax of $66.99 million.
Abacus independently valued 96% of its $895 million investment property portfolio resulting in a loss of $17.1 million. The weighted average capitalisation rate of the property portfolio was 7.75%. As at December 2008, Abacus had a net asset position of $854 million, with net tangible assets per security of $1.24.
The group said its principal investment portfolio performed well throughout the half-year with gross revenue increasing to $51.2 million and an EBITDA contribution of $41.4 million. Rental income increased at an annualised rate of 3.6%, occupancy levels remained at 93% and the average lease term remained at approximately five years.
The funds management business contributed $9 million to the group’s results. The joint ventures and projects business generated $1.5 million in earnings for the half-year. Property finance assets remained unchanged at $137 million. Interest and fee income for the half-year was $5.1 million, after taking a provision of $3.2 million.
Abacus said it made significant progress during the half-year in reducing its total liabilities and gearing ratios by selling its self-storage assets to Abacus Storage Fund and completing the development of Aspley Shopping Centre. However these efforts were offset by unrealised revaluation losses on Abacus’ investment properties and its fixed interest rate contracts.
Consequently, gearing was reduced from 37.5% at June 2008 to 36.6% at December 2008 and covenant gearing was reduced from 44.9% to 44.5% over the same period.
Abacus has launched a $187 million rights issue to reduce debt and strengthen the Abacus balance sheet.
The Offer price is 25 cents per new security which will rank pari passu with existing shares.
Existing securityholders will receive a distribution of 1.75 cps per security for the quarter ending March 2009.
The targeted distributions to be paid on completion of the offer are 0.75cps for the quarter ended June 2009; and 3.0cps for the year ended June 2010.
Australian Property Journal
