21 Nov 2013

Argosy reports dramatic jump in profit

7:18 pm on 21 November 2013

Argosy Property has reported a dramatic jump in first-half profit, largely due to gains in the value of its hedging contracts.

The listed property investor reported a net profit of $30.1 million for the six months to September, compared with $4.5 million for the same period last year.

The profit includes a $16 million gain from hedging contracts, compared with a $13 million loss last year, which Argosy said reflected recent increases in long-term interest rates.

Excluding such non-cash profits, the amount Argosy can distribute rose 17.8% to $23.7 million.

Argosy chief executive Peter Mence says it was a period of modest growth which was in line with projections.

Argosy says compared with the same period last year, occupancy of its buildings rose one percentage point to 97.3%.

During the period, Argosy signed 35 lease transactions, including 22 new leases and 13 renewals or extensions.

The weighted average lease term as at the end of September improved to 5.9 years, up from 5.3 years in September last year.

The trust will pay a dividend of 1.5 cents per unit for the September quarter and investors can take the payout either in cash or in new units.