ALE raises glass to positive outlook
Listed pub landlord ALE Property has reported a 1.4 per cent rise in annual net profit to $53.3 million, thanks to a decrease in borrowing expenses.
It also had a rise of 1.9 per cent in property valuations over the year. ALE, which leases 87 pubs to the Woolworths-run Australian Leisure and Hospitality group, reported an unchanged final distribution of 8¢, taking the annual payment to 16¢, payable on September 5.
The results were in line with market expectations.
Managing director Andrew Wilkinson said the outlook was positive after the group restructured its finances and hedging policies.
He said it was "exploring the opportunity to further diversify its funding sources". That could be an equity-funded portfolio acquisition of small assets with long-term leases and high-quality tenant covenants.
During the year, Australian Leisure and Hospitality as tenant undertook capital improvements across the portfolio, including the addition of 20 Dan Murphy's stores.
Mr Wilkinson said borrowing expenses had declined by 22 per cent from the hedging restructure completed in December. In the year to June 30, ALE's market capitalisation increased about 50 per cent to more than $500 million.
Mr Wilkinson said this resulted from $72 million of capital raisings through a placement, and distribution reinvestment plan, as well as a $107 million increase due to security price increases.
"Our objective is to grow distributions from 16¢ per security ... by CPI [inflation rate] until the next refinancing. This assumes an unchanged portfolio, hedging and capital structure."