This article is from the Australian Property Journal archive
RURAL Funds Group has announced increased earnings for the first half, weeks after winning a Supreme Court hearing against nemesis Bonitas Research.
Property revenue after its $900 million-plus portfolio increased 22% to $37.6 million and adjusted funds from operations per unit lifted 11% to 7.1 cents. Forecast AFFO increased to 13.5 cpu, and distributions forecast at 11.28 cents is in line with the 4% growth target.
Total comprehensive income earnings per unit increased 16% to 8.9 cents.
RFF said the first half results are largely due to the JBS feedlot acquisitions and J&F limited Guarantee income, cattle acquisitions, development capital expenditure and lease indexation. Positive revaluations were also received on macadamia orchards, as well as cattle properties reflecting the rollout of productivity improvements.
During the period, RFF entered into contracts to acquire six cattle properties and two other properties to be converted to macadamia orchards, sold off 17 poultry farms to ProTen Investment Management Pty Ltd and associated plant and equipment, and leased cattle property Rewan to ASX-listed AACo, providing a material uplift in rental income.
Allegations from Texas-based Bonitas in August declared RFF stock was “worthless”, and $355 million was wiped from RFF’s market capitalisation within 30 minutes of morning trade. RFF launched legal action and was the only party present in the case after Bonitas Research said it does not recognise the jurisdiction of the Supreme Court of NSW.
Last month, Justice Hammerschlag ruled that statements made by Bonitas and its principal Matthew Wiechert breached the Corporations Act and “were false in material particulars and materially misleading” and were “deceptive and likely to deceive”.
The Court will consider the assessment of damages on Thursday.
One month after the Bonitas statement, RFF was forced to dismiss new allegations by Hong Kong-based Bucephalus Research, which declared the fund to be a Ponzi scheme “that could collapse at any time”.
RFF owns 38 properties across five agricultural sectors. The portfolio has a weighted average lease expiry profile of 11.5 years.
