Image source: Shutterstock

Highlights

  • Argosy Property saw a turnaround in H1 FY25, reporting a net profit of NZD 32.97 million versus a NZD 19.35 million loss in the prior period, driven by a revaluation gain.
  • Despite the profit recovery, net distributable income declined by 6.87% due to increased tax expenses from changes in building depreciation deductions.
  • ARG's shares have fallen approximately 11.6% in the last six months and nearly 13% over the past year.

Argosy Property Limited (NZX:ARG) is a New Zealand-based real estate investment trust (REIT). The company, which primarily invests in industrial, office, and large-format retail properties across Auckland and Wellington, reported a significant turnaround in profitability in the half-year ended 30 September 2024 (H1FY25).

In H1FY25, the company posted a net profit after tax and total comprehensive income of NZD 32.97 million, compared to a loss of NZD 19.35 million in the same period last year. This improvement was largely attributed to an NZD 8.7 million revaluation gain, reversing the NZD 50.8 million revaluation loss recorded in H1 FY 2024.

However, net distributable income fell by 6.87% year-on-year, reaching NZD 27.51 million. This decline was primarily due to a higher tax expense of NZD 1.4 million, driven by changes in government tax treatment related to depreciation on buildings.

Key Positives and Negatives

  • A higher gross margin of 74.7%, compared to the industry median of 60.7%
  • An EBITDA margin of 67.6%, well above the industry median of 55.1%
  • The debt-to-equity ratio rose to 0.65x, up from 0.63x in H1 FY 2024.
  • Property expenses increased to NZD 19.7 million, compared to NZD 17.8 million in the previous year.

Outlook

Looking ahead, Argosy maintains a decent outlook, bolstered by its strategic pivot toward industrial assets and continued efforts to enhance portfolio quality. However, the company remains cautious due to external risks including a potential global economic slowdown and persistent macroeconomic headwinds.

The company is focusing on shareholder-friendly initiatives like the Dividend Reinvestment Plan (DRP).

Top 10 shareholders of ARG

The top 10 shareholders of ARG have around 23.63% shareholding in the company. Accident Compensation Corporation and BT Funds Management (New Zealand) Ltd. have the maximum stake in the firm with a shareholding of around 9.62% and 4.20%, respectively.

Share performance of ARG

ARG shares closed at NZD 0.99 per share on 29 April 2025. Over the past six months, ARG’s share price has dropped by approximately 11.6% and in a year, it has shed almost 13%.

52-week high of ARG is NZD 1.20, recorded on 5 September 2024 and 52-week low is NZD 0.965, recorded on 23 April 2025.

Resistance and support summary

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 29 April 2025. The reference data in this report has been partly sourced from EODHD/Others.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.