CROMWELL Property Group (ASX: CMW) has reported a 28 per cent increase in operating earnings to a record $102.4 million, sustained by the group’s billion dollar property portfolio.
The operating earnings equate to 7.6 cents per security (cps), above guidance of 7.5 cps. Distributions of 7.25 cps were paid throughout the year.
Property investments continue to be the backbone of the group’s income, contributing $97.2 million after debt costs. The figure represents 95 per cent of operating earnings for the year, an increase of 21 per cent on the previous year.
The increase is attributed to growth in existing property income of 2.8 per cent, as well as growth in additional rental income from property acquisitions during the past two years including the NSW Portfolio and Brisbane CBD properties acquired in May.
Cromwell CEO Paul Weightman (pictured) says the strong operating result is further evidence of the group’s disciplined, long-term investment strategy and stable management team.
“We are pleased to have once again delivered a record operating earnings result while continuing to improve the size and quality of our portfolio throughout the year,” he says.
“This is consistent with our strategy of providing secure, steadily growing distributions to investors through the ownership of a portfolio of quality assets with a long weight average lease expiry.”
Weightman says the outlook is positive despite sluggish economic growth. The property portfolio is expected to continue to deliver consistent earnings in 2014. Operating earnings per security are expected to rise 9.2 per cent to 8.3 cents, while distributions are also expected to increase to 7.5 cps (annualised) from the September 2013 quarter, an increase of 3.4 per cent on 2013 levels.
“We expect to achieve good growth in both operating earnings and distributions per security in 2014, underpinned by this strong property portfolio and the funds management business, which we believe can continue to deliver significant growth in future years,” he says.
Cromwell shares remained stable following the announcement at 99 cents per share.
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