Insights

Did you miss the Rural Funds (ASX:RFF) 94% profit growth in HY21?

Rural Funds (ASX:RFF) reported its FY21 half-year result yesterday, it showed a 94% increase in its profit as well as 4% distribution growth.
The post Did you miss the Rural Funds (ASX:RFF) 94% profit growth in HY21? appeared first on The Motley Fool Australia. –

asx rural real estate shares represented by green up trending arrow sitting in a field of green crops

Rural Funds Group (ASX: RFF) reported its FY21 half-year result yesterday, which included a large increase in its statutory profit.

What happened with Rural Funds?

The agricultural real estate investment trust (REIT) announced that its earnings (total comprehensive income) per unit increased by 94% to 17.3 cents.

Rural Funds also reported that its adjusted net asset value (NAV) per unit – which includes water entitlements at market value – increased by 4% to $2.01.

The increase in earnings and adjusted net assets are largely driven by the sale of the Mooral almond orchard at a 21% premium to the book value. This money will be used for re-investing in other farms.

In terms of the adjusted funds from operations (AFFO), it decreased by approximately 7% to 6.6 cents per unit. However, it’s on track to meet its forecast of 11.7 cents per unit. Rural Funds said that AFFO would increase after the completion of its development plans.

There was an increase of the guarantee associated with the JBS-operated feedlots from $82.5 million to $99.9 million, providing increased revenue.

No rent relief was required by lessees during the period due to COVID-19.

Rural Funds disclosed that its gearing ratio was 30.2%, which is at the lower end of its 30% to 35% target.

It had a weighted average lease expiry (WALE) of 11.1 years at the end of December 2020, which is one of the longest in the Australian listed REIT sector.

Macadamia plans

The REIT acquired 22 sugar cane farms for $56.4 million and another three for $18.3 million during the period. These are being leased as cropping properties, with a plan to convert them to macadamia orchards.

Rural Funds is planning to develop 500 hectares of macadamia orchards in the 2021 calendar year. Some Rural Funds management horticultural staff have relocated to central Queensland to oversee the macadamia developments.

It also acquired two cattle properties for $13.1 million for near-term development to macadamia orchards.

The farmland landlord said that it has existing earnings and balance sheet capacity to enable the commencement of the developments while continuing to fund distributions.

Rural Funds Management said that it is currently in the process of securing lessees to further increase revenue generation.

Rural Funds distribution guidance

The FY21 half-year distributions amounting to 5.64 cents per unit is on track with the full-year forecast. The AFFO payout ratio for the six-month period was 85%.

Rural Funds also announced that the forecast FY22 distribution per unit is 11.73 cents, which is in-line with its annual 4% growth target.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Did you miss the Rural Funds (ASX:RFF) 94% profit growth in HY21? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!