17 Nov 2020

Investore reports net profit of $91m for September half year

11:31 am on 17 November 2020

The big retail store and supermarket property owner, Investore, has made a significant half-year profit as its tenants fared well during the lockdowns and the value of its properties rose.

Larger than usual queues outside of Countdown Greenlane a day before the supermarkets shut on Good Friday.

Countdown is one of Investore's tenants which was able to continue operating during lockdown. Photo: RNZ / Claire Eastham-Farrelly

The company, which is managed by Stride Investment Management, reported a net profit for the six months ended September of $91 million compared with just under $10m the year before. The bottom line was lifted by a $87m gain in the value of its properties.

"The focus on large format retail property has also positioned Investore well to manage the impacts of Covid-19, due to the concentration of the portfolio on nationally recognised tenants focused on 'everyday needs', including supermarkets," the company said in an announcement to the stock exchange.

Revenue rose by nearly 14 percent to $27.4m, as rental income lifted by $10m on a year ago. That reflected the acquisition of three stores during the period and the designation of many of its tenants as essential businesses during the lockdowns.

The value of Investore's portfolio rose 9.4 percent to $980.3m.

Investore said it worked closely with tenants throughout the pandemic, providing rental support through a combination of abatements and deferrals in return for extending lease terms.

This led to an average lease extension of seven months across the period.

It was forecasting a drop in its rental income of about $1m due to Covid-19, which is at the lower end of its initial guidance of a $1m to $2m fall.

The company also strengthened its balance sheet during the period by raising $105m through a share issue in April and a further $125m through a retail bond offer in August to pay down debts and expand its portfolio.

"Investore's focus will be on targeted growth to enhance the portfolio and maximise returns to investors of the medium to long term.

"This growth includes potential acquisitions, as well as development of the existing portfolio, including refurbishment of stores."

Shareholders would receive a quarterly dividend of 1.9 cents per share.