Fair value gains of $392.5m drove FY21; FFO rose 14.4%

Reported revenue (which on the income statement includes valuation movements) rose 431.0% to $517.2m, profit before tax rose 248.4% to $472.8m, and net profit after tax rose 298.9% to $452.8m. Because the revaluation gain sits inside the FY21 base, this is not a clean like-for-like trend versus FY20 and the growth comparison has a basis discontinuity. The cleaner cash earnings read — Funds From Operations, as disclosed by the company — rose 14.4% to 11.07 cents per share.

Operating cash flow was up 59.6% to $56.1m on a fully occupied industrial portfolio. Net tangible assets per share rose 37.3% to 303.4 cents, total assets grew 31.4% to $2.2b, and gross borrowings expanded 22.7% to $601.2m, leaving disclosed gearing at 27.7%.

The $392.5m fair value gain explains most of the gap between reported revenue of $517.2m and FY20's $97.4m rental and management fee base. Because the revaluation sits inside revenue and NPAT, these growth rates are not analytically comparable to FY20 on a like-for-like basis — the reporting basis has a discontinuity. The 14.4% FFO uplift is the figure that maps to recurring cash earnings.

Tax rate flatters NPAT. The effective tax rate moved from 16.4% to 4.2%, which is why NPAT growth of 298.9% exceeds PBT growth of 248.4% by 50.5 percentage points. The NPAT growth figure carries a basis discontinuity from the non-cash revaluation and a denominator caveat from the low tax charge, so it should not be read as a clean operating trend. PBT is the cleaner operating read, but it too is dominated by the same non-cash revaluation gain rather than rental performance.

Balance sheet expanded on both sides. Total equity moved to $1.6b on the revaluation (a 37.5% lift on a non-comparable basis given the fair value uplift), while gross borrowings rose 22.7% to $601.2m. Reported gearing of 27.7% sits below HY21's 30.0%, helped by the revaluation lifting the equity denominator more than borrowings grew.

ABC Tissue acquisition changes the revenue-base context, with NZ$91.7m acquisition price, but reported revenue still needs source-backed operating support.

Rosebank Road acquisition changes the revenue-base context, with NZ$39m acquisition price, but reported revenue still needs source-backed operating support.

There is a flagged 2022 dividend range tied to strategy progression and current industrial market conditions, but no specific cents-per-share figure or medium-term FFO target is in the supplied data. The FY21 full-year cash dividend totalled 7.90 cents per share, 2.6% above FY20.

HY21 contributed 60.4% of full-year NPAT and 59.3% of full-year revenue, reflecting first-half-loaded revaluation timing rather than a true seasonal pattern; the basis is not comparable across halves. Because no quantified forward target is supplied, durable read-through is limited to FFO trajectory, occupancy retention, and gearing direction.

Only $56.1m of operating cash flow was generated against that NPAT, giving FCF-to-NPAT of 7.1% on the pre-lease basis. The FY20 comparator of 14.3% is not directly comparable because the FY21 NPAT denominator is distorted by the revaluation gain. Reading the result through FFO (up 14.4%) and AFFO trajectory gives a more useful view of the recurring earnings base.

Capex intensity at 4.6% of revenue (versus 19.5% in FY20) is similarly denominator-distorted by the revaluation-inflated revenue figure; capex in dollar terms grew 26.3% to $24.0m, which is the more meaningful read. Annolyse's historical baseline records pre-lease free cash flow of $32.2m as above the company's historical range (3-period mean $4.6m). That is a genuine step-up, but it remains small relative to the headline NPAT print and reflects a fully occupied portfolio and a larger rental base rather than margin expansion. The 4.2% effective tax rate is a further reason to treat the NPAT-derived ROE of 29.0% (versus 10.0% prior, not a clean same-basis comparison) with caution.

This briefing cannot assess cap-rate sensitivity, lease expiry profile, or covenant headroom from the supplied data.