Kennedy Wilson improves NAV and earnings in first half

Kennedy Wilson posted its half-year results for the six months to 30 June on Friday, with a 5.1% increase in adjusted NAV per share to 1,233.8p.

The FTSE 250 firm also reported a 60% increase in dividends paid of 24.0p per share, for a total of £32.6m of dividends paid in the period.

It declared a quarterly dividend of 12p per share, up from 10p.

Net operating income rose to £78.7m, from £58.4m a year ago, although net profit after tax almost halved to £78.7m from £149.3m.

Adjusted earnings improved to £36.2m from £31.0m, leading to a rise in adjusted earnings per share to 26.8p, from 23p.

During the half, the board said it raised a further €150m to its 2025 euro bonds, increasing the issue to a benchmark size of €550m on a ten-year term, meaning 89% ofits euro balance sheet is now hedged.

Kennedy Wilson claimed a low weighted average cost of debt of 2.9%, with 88% of debt fixed or hedged, and a long debt term of 6.0 years with a loan-to-value ratio of 41.8% within the target range.

“These strong half-year results demonstrate the team's ongoing ability to deliver robust underlying profits from a secure and diverse £3.1bn portfolio,” said board chairman Charlotte Valeur.

“As such, the board is pleased to announce a further 12.0p per share dividend to be paid in Q3-16, on track to deliver 48.0p per share annualised target for 2016, a 37% increase over 2015, and reflecting an attractive dividend yield of 4.9%.

“Following the result of the EU referendum, the board takes comfort in the strong financial position of the business with significant cash liquidity and low levels of capital commitments supported by robust operating metrics,” Valeur explained.

At the end of the period, Kennedy Wilson’s portfolio value stood at £3.0632bn.

It completed 85 commercial lease transactions during the half, and delivered an uplift over previous passing rent of 4.3%, outperforming valuer ERVs by 1.8%.

The board described portfolio occupancy as “strong” at 95%, with long WAULTs of 7.0 years.

It took direct title of Pioneer Point, now held as direct real estate worth £76.0m.

Its disposal programme delivered a further £165.5m of completed sales across 30 properties at an average exit yield of 5.8%, a spread of 190bps over entry yield on cost and generating a return on cost of 24.0%.