Cache Logistics Trust's profit jumps 13.9% to $18.3m

Thanks to rental escalations.

According to OCBC, Cache Logistics Trust (CACHE) turned in a consistent set of 4Q12 results after market close yesterday. NPI grew 13.9% YoY to S$18.3m, while distributable income rose 12.8% to S$15.2m on the back of contribution from its two acquisitions in 2012 and rental escalations within its portfolio.

DPU for the quarter registered a 2.5% increase to 2.154 S cents, notwithstanding an enlarged unit base from the private placement in Mar 2012.

For FY12, DPU totalled 8.365 S cents (+1.6%), matching our/consensus full-year DPU forecasts of 8.29/8.3 S cents. This translates to an attractive FY12 yield of 6.4%, higher than the S-REIT sector average yield of 5.8%.

Here's more from OCBC:

CACHE’s portfolio occupancy as at 31 Dec 2012 remained at 100% as its leases are predominantly based on triple-net master lease structures. Weighted average lease to expiry also stood resilient at 3.9 years (4.1 years in prior quarter), with only 1.7% of GFA due for renewal in FY13.

In addition, its built-in rental escalation for master leases was maintained at 1.25-2.5%. This should give CACHE with good earnings visibility and healthy organic growth in our view.

With the major refinancing exercise in Jun 2012, CACHE had successfully increased its loan-to-value over its previous collateral (including an enlarged revolving credit facility), reduced its all-in financing costs by 37 basis points YoY to 3.52% and enhanced its debt expiry profile (no debt will mature until 2015).

Aggregate leverage was also healthy at 31.7%, and represented a 0.9ppt improvement QoQ due largely to a S$26.2m revaluation gain on its portfolio assets (+2.8%).

This provides CACHE with the financial resources and flexibility to drive its new business initiatives. We now factor in the results into our forecasts. As such, our fair value inches up from S$1.30 to S$1.32.