BWP Trust reports: What every investor needs to know

BWP Trust (ASX:BWP) has capped off another strong year with a modest dividend increase.

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Units in listed property investment vehicle, BWP Trust (ASX: BWP), drifted mostly sideways on Wednesday following the release of its full year results.

In the year to 30 June 2015, BWP reported a 13.7% increase in income, to $144.9 million, and a final distribution of 8.17 cents per unit, up 4% over last year's final payment. The final distribution takes the full year payment to 15.84 cents, up 7.7% year-over-year.

In addition to a healthy income and distribution result, BWP achieved a number of operational goals, including:

  • The divestment of six non-core properties
  • Acquisition of the Australind Bunnings Warehouse development site and newly constructed store
  • Development of four Bunnings stores
  • 20 market rent reviews, with an average 8.2% increase in annual rents
  • Achieved like-for-like rental growth of 2.6%
  • Replaced and extended all bank facilities, and reduced unused bank facilities by $45 million
  • Lowered the average cost of debt
  • Extended lease expiry to 6.6 years, with 100% occupancy
  • Achieved a revaluation gain on the property portfolio of $108.5 million
  • Increased net tangible assets to $2.24 per share, up 8.2%; and
  • Reported gearing of 24.1% at June 30, down from 24.4% a year earlier

BWP said slow global growth and low official interest rates continued to drive demand for prime real estate – evident from its non-cash $108.5 million revaluation gain. However, the higher prices of real estate "may limit portfolio growth", the company said.

A lower inflationary environment also lessens BWP's ability to increase rental income since 58% of rents will be adjusted at the Consumer Price Index (CPI) throughout the year to 30 June 2016. A further 7% of rents will be subject to a rent review this year, while the remaining 35% are subject to fixed increases of 3% to 4%.

All else being equal, BWP said the Trust could expect the distribution per unit to be up approximately 5% in the coming year.

A better dividend stock than BWP Trust

Motley Fool contributor Owen Raskiewicz has no position in any stocks mentioned. Owen welcomes your feedback on Google+ (see below), LinkedIn or you can follow him on Twitter @ASXinvest. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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