BWP Trust (ASX: BWP) will be watched closely by investors today after the property landlord reported its financial results for the year ended 30 June 2018.
BWP Trust is a real estate investment trust (REIT) that leases most of its big-shed properties to Bunnings Warehouse, which is the hardware store run by Wesfarmers Ltd (ASX: WES).
Here are some of the highlights from BWP’s report:
- Revenue increased by 0.6% to $153.4 million
- Distributable profit up by 1.7% to $114.4 million
- Distribution per share went up 1.7% to 17.81 cents per unit
- Net value per share (NTA) increased by 4% to $2.85
This result was driven by the average 2.5% like-for-like rental growth that BWP achieved during the year. The gearing, or ratio of debt to assets, dropped from 20.4% to 19.3% with one property divestment during the year and a further four planned.
According to Bloomberg, analysts were expecting net profit of $145.2 million, which compares to $183 million of total profit reported by BWP Trust including gains in the value of properties, and $114.4 million profit excluding the gains.
BWP now has a core portfolio of 66 properties with 40% of them located within 20km of a CBD, the company said. The average length of these leases is around five years.
The REIT also is re-positioning a number of properties because some Bunnings sites are moving to old Masters locations. BWP Trust is working on eight locations to be re-focused to new uses.
BWP Chairman Erich Fraunschiel told investors in his annual letter:
“The Trust is in a strong financial position at year end with a high quality core portfolio of well-located Bunnings Warehouse properties, balance sheet flexibility, and good future prospects for Trust-owned properties that Bunnings has vacated, or is considering vacating.”
