Hotel Property Investments upgrades distribution guidance
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The news: Takeover target Hotel Property Investments (HPI) has upgraded its full-year distribution guidance following a recent debt refinancing and cost saving forecast.
The numbers: HPI now expects full-year distribution to be 19.7 cents a share, up from its previous estimate of 19.5 cents a share.
Shares in the company are down nearly 1% to $3.58 in early trading on the ASX.
The context: The ASX-listed REIT, which owns a portfolio of 58 pub assets, said its portfolio continued to perform strongly, maintaining 100% occupancy.
“This upgrade is primarily driven by our recent refinancing, which has provided an additional $100 million in debt capacity and forecast annual cost savings of $1.1 million,” new CEO John White told shareholders at the company’s annual general meeting.
The company reiterated that the $3.85-a-share takeover offer by Charter Hall Retail REIT and superannuation fund Hostplus, which it has rejected, materially undervalues the company at a time when the outlook for REITs is improving and low-risk assets like HPI’s pubs are well positioned to deliver robust performance and distribution growth.
Separately, Charter Hall Group said it has increased its holding in HPI to 26.65%.
The sources: ASX announcement, ASX announcement
