News Column

Redefine International Says Half-Year Profit Down After Write-Offs

April 30, 2014

Anthony Tshibangu

LONDON (Alliance News) - Real estate investment trust Redefine International PLC Wednesday reported a fall in profit in the first half year, after the cancellation of its investment advisory agreement.

Th company which converted into a UK-REIT in December posted pretax profit of GBP2.0 million for the six months ended February 28, down from GBP18.1 million a year before. The company attributed the fall to GBP22.8 million related to the cancellation of its investment advisory agreement as well as a GBP2.1 million writedown of goodwill on the acquisition of its management Redefine International Fund Managers Limited (RIFM).

During the period, the company also made a GBP6.0 million loss from financial assets and liabilities compared with a gain of GBP3.1 million in the corresponding period.

Revenue, however, rose to GBP35.9 million from GBP30.4 million, largely as a result of investment income totalling GBP5.1 million. The company did not record any investment income in the comparable period.

Despite its troubles the company increased its interim dividend to 1.500 pence from 1.475 pence.

The company said its adjusted net asset value per share dipped to 38.14 pence per share compared with 38.66 pence per share at August 31. The cost of the management internalisation was fully written off in the period which had an impact of 1.96 pence per share, it said.

Redefine said this was a "good result considering the write off of GBP24.9 million associated with the share issuance in respect of the management company internalisation, and volatility in the market value of the Cromwell investment".

Redefine holds a 13.7% stake in Australian property trust Cromwell Property Group.

Occupancy across the portfolio dipped slightly to 97.2% compared with 97.3% at August 31. However, it said the decline was anticipated and was largely due to taking back 14,400 square feet of retail space to progress redevelopment opportunities.

During the period the company made disposals totalling GBP29.4 million, while it completed the acquisition of Weston Favell Shopping Centre, Northampton for GBP84.0 million.

The company said its conversion to a REIT and the internalisation of its management in December marked the successful conclusion of its strategy outlined some 18 months ago.

"This has, in turn, resulted in a larger free float and enhanced liquidity which has ensured the company's admission into the FTSE and EPRA/NAREIT indices and growing recognition as a mid-cap REIT," Chairman Greg Clarke said in a statement.

"This, combined with the growth in the company's market cap and reduction in leverage, has created access to new sources of funding and the ability to drive down the cost of capital, which will support our strategy to invest into high quality assets generating strong income flows with the potential for capital growth," he added.

The stock was trading down 1.8% at 55.75 pence Wednesday afternoon.

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Source: Alliance News

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