By Ian Neubauer
Australia’s largest pub owner, the ALE Property Group, has credited a solid full-year result to the diversified nature of its assets, the strength of its tenant and factors insulating its income from external fluctuations.
“Unlike others, our ability to pay future distributions is not affected by development risks, foreign exchange risks, income from property sales, changes in nominal or real interest rates, residential property prices, pub turnover or pub profitability,” ALE managing director, Andrew Wilkinson, told The Australian.
“We have first-rate properties that are geographically widely dispersed, all on long-term, average 20-plus-year CPI-indexed leases, with high-quality tenants. They continue to be highly sought-after property characteristics, particularly in the current environment," he said.
ALE increased the size of its portfolio to 103 properties in the 2007-08 fiscal year following the acquisition of four more pubs, all of which are operated by Woolworths’ owned Australian Leisure and Hospitality Group (ALH).
ALE’s pub assets have been independently revalued by DTZ at $820.3 million. The group also has three development properties valued at $22.1 million, bringing the total value of its portfolio up from $791.2 million last year to $842.4 million this year.
The figure represents a 6.5 per cent revaluation rise that comfortably offset a marginal downturn in distributable profit, down from $29.4 million last year to $28.9 million.
The results contrast with those of pub owner Hedley Leisure and Gaming Fund (HLG), which has seen its profitability and share price hammered following the introduction of non-smoking laws in the eastern states.
ALE shares were trading at $3.10 at midday today (August 10) compared to $3.05 one week ago.