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Cromwell 2017 AGM


Cromwell held its AGM last week and claimed to have again delivered ahead of guidance as they continued their realisation, recycling and reinvestment strategy to improve future earnings quality.

Full year operating profit for FY17 was $152.2 million, equivalent to 8.65 cents per security, 0.25 cents per security ahead of previous market guidance. Distributions for the year were 8.34 cents per security, representing a 1.7% increase on the previous year.

Cromwell sold the entire stake in Investa Office Fund for $4.65 per unit on 4 October 2017. The sale price was a premium to the IOF closing price on the previous day and the investment generated an annualised equity internal rate of return (IRR) of 18%.

Overall portfolio valuations increased during the year by $108.7 million net of property improvements, lease costs and incentives, lifting Net Tangible Assets by 9%, or 8 cents per security to 89 cents per security. The weighted average cap rate tightened by 0.49% to 6.56%.

As at 30 June 2017, cash and cash equivalents were $86.9 million and Group gearing was 45.2%. Debt facilities continue to be well diversified across eight lenders and a Convertible Bond issue with varying maturity dates. The Group has a weighted average debt expiry of 2.4 years on a look-through basis with 68% not expiring until the 2020 Financial year and beyond.

Cromwell expect FY18 operating profit of 8.25 cents per security and a distribution of 8.34 cents per security. This guidance represents an operating profit per security and distributions per security yield of 8.0% and 8.1% respectively based on the closing price of $1.03 on 28 November 2017.

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