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Almond asset. Source: Rural Funds Group
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  • Rural Funds Group (RFF) has announced it will pay distributions per unit (DPU) forecast of 11.28 cents for FY21
  • Rural Funds issued an FY22 forecast distribution of 11.73 cents per unit, representing a four per cent increase on FY21
  • The FY22 distribution would represent a 101.1 per cent payout ratio, meaning it plans to pay out more than it earns
  • Earnings were up by 98 per cent to 36.6 cents per unit, mainly from the sale of the Mooral almond orchard for $81.2 million
  • Shares in RFF finished the day down 0.75 per cent to $2.63

Rural Funds Group (RFF) has announced it will pay an adjusted funds from operations (AFFO) payout ratio of 95 per cent in FY21 to reach its distributions per unit (DPU) forecast of 11.28 cents.

The ratio is a 15 per cent increase from FY20 when it paid out a DPU of 10.85 cents, with Rural Funds issuing an FY22 forecast distribution of 11.73 cents per unit, representing a four per cent increase on FY21.

The FY22 distribution would also represent a 101.1 per cent payout ratio, meaning it plans to pay out more than it earns.

Earnings were up by 98 per cent to 36.6 cents per unit in FY21, mainly from the sale of the Mooral almond orchard for $81.2 million, a 21 per cent premium to adjusted book value.

During the year, increased valuations were recorded for assets across all sectors within the portfolio which also helped push revenue up, adding a combined net of $47.7m to adjusted property assets.

Cattle properties revalued over the period of time accounted for the biggest changes in valuation.

Rural Funds Management (RFM) said it continues to focus on two strategies within the portfolio that aim to boost unitholder profits.

Assets will be converted to a higher and better use, with an initial 1000 hectares of macadamia orchards in central Queensland scheduled to be built by June 2022.

The second approach, increasing natural resource asset productivity, is being implemented on existing livestock and cropping assets in the portfolio, including those that have been revalued throughout the time.

RFM is also on the lookout for more livestock and agricultural assets with growth potential.

RFF has a pro forma balance sheet capacity of up to $185 million following the completion of the entitlement offer in August 2021, which will be utilised to fund future acquisitions and macadamia orchard developments.

The completion of macadamia lessee agreements and further acquisitions are projected to boost future AFFO growth.

A $270 million debt facility due to expire in FY23 is currently being refinanced, according to the company, with its facility limit increased to $380 million in the financial year.

Another $110 million debt facility is due to expire in November 2023.

RFF has 66 properties across five sectors – almonds, cattle, cropping, vineyards and macadamias – and is the largest agricultural REIT in the country.

Its portfolio has a weighted average lease expiry of 9.3 years, with 78 per cent being leased to corporate or listed entities.

Shares in RFF finished the day down 0.75 per cent to $2.63.

RFF by the numbers
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