New Zealand Rural Land Company Limited (NS) Analysis

Overview

NZRLC is a newly incorporated company that has been formed for the purpose of acquiring rural land across the New Zealand agricultural sector. NZRLC intends to be a landlord only and will lease the rural land that it acquires to experienced tenants under long term leases. Tenants will undertake the on-land agricultural operations and pay rental to NZRLC.

In the long term NZRLC may acquire land in the dairy, sheep and beef, horticulture, viticulture and forestry sectors. However, the initial focus for NZRLC is to acquire rural land in the dairy sector.

Performance

The following information was extracted from New Zealand Rural Land Company Limited's (NS) Half Year results, released 21 August 2025:

New Zealand Rural Land Co Reports Stable HY25 Results

New Zealand Rural Land Co (NZL.NZX) is pleased to announce its financial result for the six months ended 30 June 2025. NZL recorded a consolidated net profit after tax of $3.5m and Adjusted Funds From Operations (AFFO) of $3.9m (excluding earnings from properties with put/call arrangements in place)(1).

HY25 Highlights

• AFFO grew from 1.94 cps in HY24 to 2.70 cps (+39.2%) in HY25. NZL forecasts FY25 AFFO of between 5.17 cps and 5.52cps (FY25 includes the impact of further CPI linked rental adjustments and the first full year of higher yielding horticultural acquisitions);

• CPI linked rental increases of +13.8% on 18.2% of NZL’s portfolio took effect in June 2025. A further 29.2% of NZL’s portfolio was subject to a +2.5% increase on 15 April 2025;

• On 7 March 2025 NZL acquired a 305 hectare, highly productive dairy farm in Canterbury;

• As part of the consideration for the aquisition NZL sold two pastoral farms at above book value/most recent valuations. The transaction increases NZL’s total rental income by ~$290k a year;

• WALT was 12.3 years at HY25, a decrease of -1.6% from FY24 (12.5 years);

• 17,077 hectares of rural land now owned, a decrease of -2.4% from FY24 (17,503);

• Gearing lowered to 29.8% from 30.5% at HY24 (-2.3%);

• $40m of additional interest rate swaps increasing hedging from 65% to 81%;

• Interim dividend to be paid at ~80% of AFFO, equivalent to 2.16 cps the dividend will be paid in mid-October 2025. NZL will continue to offer a dividend reinvestment programme;

• NZL continues to operate an on-market share buyback programme, no shares were repurchased during the period. 710,131 shares have been repurchased sincce the programme was initiated in June 2023;

• Net Asset Value (NAV) per share has grown from $1.25 at IPO to $1.589 at 30 June 2025 (+27.1%); and

• Net Tangible Assets (NTA) per share have grown from $1.25 at IPO to $1.606 at 30 June 2025

(+28.5%).

HY25 saw the addition of a blue chip asset to NZL’s portfolio, delivered effective risk management, decreased gearing, and sustainable growth in rental income and dividends for shareholders.

Since the end of HY25, NZL has announced a capital review of the Company’s strategic options. At the time of this announcement this process remains ongoing.