BWP TRUST ANNUAL REPORT 2015 - page 9

BWP TRUST ANNUAL REPORT 2015 7
PROFIT
Profit as disclosed in the Trust’s financial statements includes
unrealised gains or losses in the fair value of investment properties
as a result of the revaluation of the entire property portfolio every
six months (see revaluations section in Our property portfolio).
The unrealised revaluation gains or losses are recognised as
undistributed income as part of unitholders’ equity in the financial
statements and do not affect the profit available for distribution to
unitholders each period.
For the year ended 30 June 2015, net profit was $210.1 million,
including $108.5 million in gains in the fair value of investment
properties. This compares with $149.1 million last year, including
gains of $57.1 million in the fair value of investment properties.
Distributable profit for the year (excluding revaluation gains or
losses) was $101.6 million, compared to $92.8 million (including
$0.8 million partial distribution of capital profits) for the year ended
30 June 2014.
FINANCIAL POSITION
As at 30 June 2015, the Trust’s total assets were $2,018.0 million
(2014: $1,837.4 million) with unitholders’ equity of $1,441.8
million and total liabilities of $576.2 million. Investment properties
and assets held for sale made up the majority of total assets,
comprising $1,981.3 million (2014: $1,819.0 million). Details of
investment properties are contained in the Our property portfolio
section at pages 12 to 17.
The underlying net tangible asset backing of the Trust’s units
(“NTA”) as at 30 June 2015 was $2.24 per unit, an increase of
2.8 per cent from $2.18 per unit as at 31 December 2014 and 8.2
per cent from $2.07 per unit as at 30 June 2014. The increase in
NTA over the 12 months to 30 June 2015 was due to the increase
in net assets through property revaluations.
DISTRIBUTION TO UNITHOLDERS
The Trust pays out 100 per cent of distributable profit each
period, in accordance with the requirements of the Trust’s
constitution. A final distribution of 8.17 cents per ordinary unit
has been declared and will be made on 27 August 2015 to
unitholders on the Trust’s register at 5.00 pm (AEST) on 30 June
2015. The final distribution takes the total distribution for the
year to 15.84 cents per unit (2014: 14.71 cents per unit). The tax
advantaged component of the distribution is 18.27 per cent, lower
than in previous years due to the property divestments, and
taxable capital gains resulting from them.
Units allocated under the Trust’s Distribution Reinvestment Plan
(“DRP”) in respect of the final distribution will be allocated at
$3.2561 per unit, representing the average of the daily volume
weighted average price of the Trust’s units for the 20 trading days
from and including 6 July 2015 to 31 July 2015, with no discount
applied. Units to be allocated under the DRP were acquired on
market and will be transferred to participants on 27 August 2015.
CAPITAL MANAGEMENT
The Trust is committed to maintaining a strong investment
grade rating (currently A-/Stable/- Standard & Poor’s) through
appropriate capital and balance sheet management.
DEBT FUNDING
During the year, the Trust repriced and extended all of its bi-lateral
banking facilities.
The Trust’s debt facilities as at 30 June 2015 are summarised below.
Limit
$m
Amount
drawn1
$m
Expiry
date
Bank debt facilities
Australia and New
Zealand Banking Group
Limited 110.0 94.3 1 July 2018
Commonwealth Bank
of Australia 110.0 92.2 31 July 2020
Westpac Banking
Corporation 135.0 99.2 30 April 2020
Corporate bonds
Fixed term five-year
corporate bond 200.0 200.0 27 May 2019
Total 555.0 485.7
1 Amount drawn includes prepaid interest and borrowing costs of $0.3 million
as at 30 June 2015 on debt facilities
As at 30 June 2015, the weighted average duration of the Trust’s
debt facilities was 4.2 years to expiry (2014: 3.7 years) and
average utilisation of debt facilities (average borrowings/average
facility limits) for the year was 80.4 per cent (2014: 74.2 per cent).
In respect of the Trusts’ bank debt facilities, whilst these have fixed
maturity dates, the terms of these facilities allow for the maturity
period to be extended by a further year each year subject to the
amended terms and conditions being accepted by both parties.
DISTRIBUTION REINVESTMENT PLAN
The DRP was in place for both the interim distribution and
final distribution for the year ended 30 June 2015. The Trust
has continued to maintain an active DRP as a component of
longer-term capital management and to allow unitholders
flexibility in receiving their distribution entitlements. The DRP
provides a measured and efficient means of accessing additional
equity capital from existing eligible unitholders.
INTEREST RATE MANAGEMENT
The Trust takes out interest rate swaps and fixed rate corporate
bonds (hedging) to create certainty of the interest costs of the
majority of borrowings over the medium to long-term. As at 30 June
2015, the Trust’s interest rate hedging cover was 78.2 per cent of
borrowings (outside the Board preferred range of 50 to 75 per cent),
with $180.0 million of interest rate swaps and the $200.0 million
fixed rate corporate bond, against interest bearing debt of $485.7
million. The weighted average term to maturity of hedging was 3.17
years, including delayed start swaps.