Frasers Logistics and Industrial Trust DPU Jumps 2.9%

Frasers Logistics and Industrial Trust announced its 3QFY18 results on 1st August 2018. Distribution Per Unit (“DPU”) increased by 2.9% in 3QFY18 as compared with 3QFY17. This is definitely a great piece of news for me as I have recently increased my allocation of Frasers Logistics and Industrial Trust in my stock portfolio from 8% to 11%. Increasing dividend yield is one of the factors I look for when investing in REITs.

If you didn’t notice from the presentation slides, the manager has elected to receive 82.9% (9MFY17: 100%) of management fees in the form of units. In my opinion, this means that the manager will work hard to grow the DPU as a falling DPU will affect their manager fees!

As you can see from the financial results below, gross revenue, net property income and distributable income have all increased in 3QFY18 as compared with 3QFY17 so there is nothing much to quibble about.

3QFY18 Results

3QFY18
(A$’000)
3QFY17
(A$’000)
Change
Gross Revenue 49,322 40,226 22.6%
Net Property Income 39,287 30,843 27.4%
Distributable Income 30,666 25,047 22.4%
Distribution Per Unit (“DPU”) (cents) 1.80 1.75 2.9%

9MFY18 Results

9MFY18
(A$’000)
9MFY17
(A$’000)
Change
Gross Revenue 135,327 120,843 12.0%
Net Property Income 106,092 92,415 14.8%
Distributable Income 82,386 74,984 9.9%
Distribution Per Unit (“DPU”) (cents) 5.41 5.24 3.2%

Debt

The current gearing stood at 36.3%. There is still available debt headroom of A$469 million to reach 45.0% aggregate regulatory leverage limit.

A breakdown of its debt is as follows:-

  • Australian portfolio: A$630 million (58% of total debt)
  • European portfolio: A$452 million (42% of total debt)

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