- Reported a statutory profit after income tax (IFRS) of $68.1m, up from $20.5m
- All rent was paid on time from ALH - ALE’s sole tenant
- Valuation reveals portfolio is under-rented by 33 per cent
ALE Property Group, the owner of Australia’s largest portfolio of freehold pub properties, has announced its first-half FY21 results.
The main highlight is a more than tripling of its statutory profit after income tax (IFRS).
This, of course, is a strong achievement considering many pubs either closed or were scaled back during the pandemic.
For the first half of last financial year, ALE recorded a $20.5 million IFRS. For the same period this financial year, the figure has enlarged significantly to an IFRS of just over $68 million.
This is despite only a modest in an increase in revenue from properties from $30.7 million to $31.4 million which the Group says was due to inflation – in the form of CPI increases – and rental determinations.
Borrowing expenses also lowered from $11 million to $8.4 million, however, management expenses increased by almost a million. This was due to an increase in insurance and legal costs alongside costs associated with the group’s CEO transition; Guy Farrands replaced Andrew Wilkonson last year.
It was added that ALE did not receive any COVID-19 relief payments and all pub rent was paid on time – even when pubs were closed or had significantly smaller operations as a result of Covid-19.
However, a notable highlight of the group is that the independent valuers who assessed ALE’s portfolio have concluded the portfolio – which has a book value of $1.22 billion-is under-rented by 33 per cent.
85 of 86 ALE leases have annual reviews but lease expiries in 2028 gives ALE the opportunity for significant rent to their well-known tenant.
All 86 pub properties are currently leased to the Australian Leisure and Hospitality Group Limited (ALH). ALH, the largest pub operator in the country, is owned by the Endeavour Group who are subsequently 85.4 per cent owned by the Woolworths Group. Endeavour is also the largest Australian liquor retailer thanks to its Dan Murphys and BWS operations.
ALE’s shares are up at close-of-trade by 3.35 per cent at $4.93 – though better than the low of $3.32 experienced amid Covid-related chaos in March last year – still below the peak of $5.68 seen in January 2020.
