The BWP Trust (ASX: BWP) share price will be on watch on Tuesday following the release of the Bunnings landlord's half year results.
How did BWP perform in the first half?
During the six months ended December 31, BWP reported revenue from ordinary activities of $76.2 million. This was a 3.5% decline on the prior corresponding period.
This was driven largely by the rent foregone from divestments and the redevelopment of sites vacated by Wesfarmers Ltd (ASX: WES) subsidiary Bunnings that occurred during prior periods. This offset a 2.2% increase in like for like rental growth.
The property company posted a 3% decline in half year profit before gains on investment properties to $57.2 million.
Including $78.5 million of gains in fair value of investment properties, BWP reported a half year profit of $135.6 million. This was up 72% on the prior corresponding period.
The gains in fair value of investment properties following the revaluation of its entire investment property portfolio by independent valuers during the period. The value of the trust's portfolio increased by $102.2 million to $2,460.4 million during the half.
Distribution.
During the half the BWP board declared an interim distribution of 9.02 cents per ordinary unit, which is a 1% increase on the prior corresponding period.
However, the company's units traded ex-distribution for this on December 30. It will now be paid to eligible unit holders on February 21.
Outlook.
Rent reviews are expected to contribute incrementally to property income for the second half.
Management advised that there are 45 leases to be reviewed to the CPI or by a fixed percentage increase during the half. There are also 16 market rent reviews of Bunnings Warehouses in the process of being finalised.
In light of this, management expects the distribution for the year ending June 30 to be 1% higher than a year earlier. Capital profits will be utilised to support distributions as necessary.
