29th Oct 2013 11:50
LONDON (Alliance News) - Property investor Redefine International Tuesday said it swung to a profit in its last financial year after it restructured its portfolio, as continued steps to convert to a UK real estate investment trust.
The company which is domiciled in the Isle of Man and focuses on the retail, commercial and hotel sectors, reported pretax profit of GBP67.2 million for the period ended August 31, after a GBP121.9 million loss a year earlier.
Redefine made the decision to sell a small proportion of its portfolio in Australia, Cromwell Property Group, after last year's results were adversely affected by a devaluation of its assets.
It sold 86 million Cromwell securities for a profit of GBP10.5 million and the firm said the "subsequent change in accounting treatment to recognise the Cromwell investment at fair value contributed significantly to the profit".
Redefine said the restructuring of the VBG portfolio, which is part of its Wichford asset, resulted in a GBP16.4 million debt cancellation which also contributed to the profit.
However the company, which has investments in the UK, Germany, Switzerland and Australia posted a dip in revenue to GBP56.0 million, from GBP78.1 million in 2012, which it blamed on a fall in gross rental income.
Looking ahead, Redefine said future acquisitions in the hotels business would be limited, partly as a result of the limited number of suitable investment opportunities coming to the market and as a result of current pricing expectations.
"The immediate focus will therefore remain on adding additional rooms where possible and on revenue growth," the firm said.
In the UK stable income market, which includes commercial properties, the company said "a stronger economy and improving occupier sentiment are creating opportunities to acquire relatively high yielding assets in areas with improving property fundamentals. The immediate focus will be on recycling capital from redevelopment sites into new investments."
The company's net asset value per share increased 6.2% to 38.66 pence, from 36.41 pence and increased its portfolio occupancy to 97.3% from 96.9% in February.
During the period Redefine also completed its secondary listing on the Johannesburg Stock Exchange.
Redefine said it was pleased with its results and steps to convert to a REIT were advanced.
"The economic outlook for the year ahead is increasingly positive and we firmly believe that, with an internalised management and industry benchmarked REIT structure, the company is well positioned to deliver strong returns to shareholders," Chairman Greg Clarke said in a statement.
The board declared a second interim dividend of 1.635 pence per share on October 28 a decline from 2.30 pence last year, resulting in a total dividend of 3.11 pence per share for the year ended August 31.
No final dividend is proposed.
The stock was trading unchanged at 6.30 pence Tuesday.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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