This article is from the Australian Property Journal archive
RURAL Funds Group has powered to a 98% increase in annual earnings, following the sale of the Mooral almond orchard and upwards property valuations due to strong cattle prices.
Earnings came in at 36.6c per unit, while the pro forma adjusted net asset value lifted 13% to $2.20 per unit.
Adjusted funds from operations was in line with forecast at 11.9c per unit, as were distributions at 11.28c, and the group is expecting a 4% increase in distributions to 11.73 cpu this year.
Pro forma gearing of 25% was below the target range of 30 to 35%.
The group said the increase in earnings and adjusted net assets are largely driven by the sale of the Mooral almond orchard, at a 21% premium to adjusted book value, and increased valuations recorded for assets across all sectors. They added a combined net $47.7 million to adjusted property assets, with the largest movements attributable to cattle properties.
Its responsible entity, Rural Funds Management Limited (RFM) said it continues to focus on the conversion of assets to higher and better use, with an initial 1,000 hectares of macadamia orchards expected to be developed in central Queensland by June next year, as well as improving productivity of natural resource assets, which is being deployed on existing cattle and cropping assets.
“RFM is also seeking to acquire additional cattle and cropping properties which have development potential,” it said.
RFF has a pro forma balance sheet capacity of up to $185 million following an entitlement offer completed this month, which is intended to be used to fund additional acquisitions and macadamia orchard developments.
Future AFFO accretion is expected to be driven by macadamia lessee arrangements and further acquisitions.
