FINANCIAL results for Rural Funds Group (RFF) have proven to be strong, according to its latest report, despite share prices taking a dive last month after United States group, Bonitas Research, disgraced the company.
RFF is the largest fund managed by Rural Funds Management (RFM).
Last year RFF spent about $380 million on property and business investments, with one deal of five feedlots and cattle possibly being one of the biggest transactions ever seen in the Australian grainfed beef industry.
The group has continued to purchase more properties, growing its portfolio to 50 landholdings as at June 30, 2019, from 38 for the corresponding time in 2018.
For the 12 months ending at the 2019 financial year, RFF recorded $66.391m in property revenue.
This is an increase by 30 per cent due to transactions from JBS, acquisitions, development capital expenditure and lease indexation.
Also to see an increase was adjusted funds from operations (AFFO) of $43.246m.
Total comprehensive income (TCI) and earnings per unit (EPU) were down from FY18 at $33.078m and 101 cents, respectively.
Over the past 12 months, RFF increased its total assets by $222.2m to $869.087m, primarily due to acquisitions, capex and revaluations of almond orchards, vineyards and water entitlement.
Net asset value is sitting at $525.872m at $1.47 per unit.
A weighted average lease expiry (WALE) of 11.3 years provides stability of income and long-term rental growth via a mix of rent reviews and indexation, the report wrote.
RFF owns property investments in cattle, almonds, poultry, cotton, vineyards and macadamias.
Almonds investments dominate its holdings, representing about 42pc of its assets, by value, while cattle holdings and feedlots now represent 27pc of its assets.
Its cattle assets which are in Queensland and New South Wales are valued at $274.7m, which total about 659,056 hectares and have about 150,000 standard cattle units for feedlots.
The cattle properties are leased to DA and JF Camm Pty Ltd (Camm), Cattle JV Pty Ltd, JBS Australia, Katena Pty Ltd, Elrose Enterprises Pty Ltd, Stone Axe Pastoral and Australian Agricultural Company (AAC).
The FY20 forecast expects the investments to generate a rent of $21.5m.
Almond assets are at Hillston, NSW and valued $425.9m, with 1814ha planted and 3100ha recently developed.
The FY20 rent forecast is $33.4m and leased to Select Harvests, Olam Australia Pty Ltd and RFM Almond Funds.
In Victoria and NSW, the group's 17 poultry farms have 154 sheds.
Leased to RFM Poultry, they are valued at $75.0m and have a FY20 rental forecast of $10.9m.
In central Queensland, the cotton assets span 7822ha.
With a value of $51.4m, the FY20 rental forecast is $3.3m and are leased to Cotton JV and RFM.
RFF's vineyards in South Australia and Victoria measure 666ha.
They are valued at $64.1m and have a FY20 rental forecast of $3.9m
These assets are leased to Treasury Wine Estates.
The group's 259ha macadamia orchard is in Queensland.
Leased to the 2007 Macgrove Project and RFM, it is valued at $14.4m and has a FY20 rental forecast of $1.5m.
In the portfolio updates section of the report, it said the group's projects on cattle involved improving access to water and higher quality feed.
The report said the lease of the property Rewan, Rolleston, Queensland to ACC is anticipated to commence on Tuesday, October 1, 2019.
RFM has proposed a merger to the investors of three tax-effective Managed Investment Schemes, which are lessees to RFF.
In terms of cotton, the group is increasing in irrigable area and water storage.
The aforementioned developments all have the aim of increasing productivity and therefore the value of each asset.
The group is reportedly looking at further possible cattle sector investments and more nut opportunities.
RFM said it will also continue to pursue acquisitions which will benefit from productivity development.