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BWP Trust announces solid full year result and special distribution

The BWP Trust (ASX: BWP) share price will be on watch this morning after the landlord of Wesfarmers Ltd (ASX: WES) subsidiary Bunnings released its full year results.

How did BWP Trust perform in FY 2019?

For the 12 months ended June 30, BWP Trust reported a 2% increase in revenue to $156.3 million and a 2% lift in profit before gains on investment properties to $115.9 million. This was driven by like for like rental growth of 2.3% and its high occupancy rate of 97.4%.

Over the 12 months the company recorded a $53.4 million gain on the fair value of investment properties. This was down 24% on the prior corresponding period, leading to a 7% decline in full year profit from ordinary activities to $169.4 million.

At the end of the period BWP Trusts’ net tangible assets per unit was up 2% to $2.92, this compares to its last close price of $3.83.

A final distribution of 9.18 cents per unit was declared, bringing its full year ordinary distribution to a total of 18.11 cents per unit. This was a 1.7% increase on FY 2018’s ordinary distribution.

It also declared a special distribution of 1.56 cents per unit following the completion of property divestments over the period. Combined with its ordinary distributions, this means the company will pay a total of 19.67 cents per unit in FY 2019, which equates to a distribution yield of 5.1%.

The good news for shareholders is that management expects the trust to continue growing its distribution in FY 2020.

It advised: “Taking into account expected rental growth in the core Bunnings Warehouse portfolio, the divestment of four properties last financial year, and the timing of ex-Bunnings Warehouse stores being repositioned, the Trust could expect the distribution for the 2020 financial year to be marginally higher than the ordinary distribution paid for the year ended 30 June 2019. Capital profits will be utilised to support distributions as necessary.”

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. 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 Scott Phillips.