Hotel Property Investments (HPI) H2 2024 earnings summary

Executive summary

• Portfolio comprised 59 properties valued at $1.28b, with 100% pub occupancy and strong tenant covenants.

• Net asset value per security was $4.01, slightly down from $4.02 year-over-year.

• Distribution per security increased 2.2% to 19.0c, with total distributions of $37.7m, in line with guidance.

• Adjusted Funds from Operations (AFFO) rose 4.4% to $37.7m year-over-year.

• Four assets sold for $48.6m, with proceeds recycled into a $50m refurbishment program to enhance portfolio value.

Financial highlights

• Rental income grew 3.2% to $73.2m compared to the prior year.

• Operating profit increased 3.5% to $64.6m year-over-year.

• Net profit after tax was $36.0m, up from $3.6m in FY23, reflecting lower fair value losses.

• Management expense ratio improved to 36bps from 38bps year-over-year.

• Gearing was 37.0% at June 2024, at the lower end of the target range.

Outlook and guidance

• Focus remains on delivering secure income streams and increasing distributions through acquisitions, divestments, and refurbishments.

• Strong partnership with AVC continues to provide growth opportunities.

• Ongoing review of portfolio to recycle capital into higher returning assets and strengthen the balance sheet.