DNZ went into a trading halt yesterday while the equity book-build got under way.
For DNZ's full-year trading to March it booked a 119% gain in after-tax profit, up from $20.7 million a year ago to $45.5 million, aided by acquisitions and and a 99.6% occupancy rate.
Its portfolio at March was valued up $15.7 million from a year ago to $667 million. During the year there was $36 million in sales, plus purchase of office buildings in Auckland, and adjacent land, for a total $18.6 million.
DNZ announced a fourth-quarter dividend of 2.5c a share, taking the full-year dividend to 9c. DNZ shares were unchanged at $1.71 after the announcement.
While rental income fell 13.6% from $58.7 million to $57.9 million, operating expenses were down almost 25%, with after-tax rental income rising by $600,000 to $53.5 million. During the year there were 171 lease transactions totalling about 244,893sq m for total annual rental of $39.7 million.
Craigs Investment Partners broker Chris Timms said it was a ''good'' result from DNZ, in line with market expectations and underpinned by high occupancy and good leasing terms.
Mr Timms said earnings before interests and tax, at $45 million, were down 2% on last year, after adjusting for increased lease incentives and higher indirect expenses.
DNZ chairman Tim Storey said the ''outstanding financial results'' were through prudent capital management, the occupancy level, reduction of lease expiry risk and advancing the company's acquisition strategy around Auckland.
During the year DNZ raised $4.6 million in a dividend reinvestment plan, and yesterday announced it was seeking $60 million in private placement from from institutions, and a further $20 million in a shareholder offer, to partially fund acquisitions of the Silverdale Centre and Westgate Zone 5 Land in Auckland.
The Silverdale Centre unconditional purchase was $78 million, comprising 36 bulk and specialty retailers, while the Westgate Zone land is a conditional agreement to purchase, for $25 million, with existing consents to build an enclosed shopping centre of about 26,000sq m.
Mr Timms said the equity-raising, likely offered at a discount, would be welcomed by the market, with some shareholders opting to ''top up'' their stake.
He cautioned that the acquisitions raised DNZ's risk profile, until more detailed announcements were made on progress of each of the developments DNZ debt ratio sat within its target range of 30%-40%, at 36.9%, well below the banking covenant limit of 50%.
Mr Timms said DNZ ''benefited significantly'' from a lower net interest expense of $15.6 million, down 13% on a year ago, as expensive swaps finished and DNZ renegotiated its loan facilities. DNZ chief executive Paul Duffy, said management had ''performed strongly'' in reducing DNZ's lease expiry risk and maintaining its high portfolio occupancy rate.
Aside from the Silverdale Centre and the Westgate Zone land purchases, the successful leasing of two development projects in Penrose, Auckland, with construction having commenced, had rounded off ''a very productive year by management'' for its shareholders.
