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FY21 result: Why BWP Trust (ASX:BWP) is a dependable ASX dividend share

BWP Trust (ASX: BWP) has released its FY21 result to investors, proving once again to be a dependable ASX dividend share.

BWP Trust is a real estate investment trust (REIT) that owns a large portfolio of Bunnings properties around the country.

FY21 result

The business reported total income for the full 2021 financial year was $152.2 million, down 2.3% from last year. Rental and other property income was $3.4 million lower than last year, largely due to the $2.7 million of forfeited deposits received in FY20.

BWP Trust said that there were 16 market reviews (including 13 Bunnings Warehouse properties) finalised during the year with rents “broadly in line with the market”. Like for like rental growth for the year was 1.6%, taking into account the average inflation on CPI linked leases of 0.5%.

At the end of the year, the portfolio had an occupancy rate of 97.8%.

Profit before valuation gains on investment properties fell by 2.6% to $114 million because of the decline in rental income.

It saw valuation gains of its properties of $149 million. That was 59.4% higher than FY20’s gains (which totalled $93.6 million).

That means that BWP Trust made a total accounting profit of $263.2 million, up 24.9% from last year.

The growth in the value of properties helped the underlying net tangible assets (NTA – the underlying value of BWP units) increase by 7.5% over the year from $3.06 to $3.29.

BWP Trust distribution

BWP Trust’s final distribution is 9.27 cents per unit, taking the full year distribution to 18.29 cents per unit, the same as last year.

Summary thoughts on the BWP Trust share price and dividend

At the pre-open BWP share price, it has a distribution yield of around 4.5%. That’s not bad in this environment. However, it seems to be valued at almost 25% higher than its NTA. To me, that’s pricey for a business that’s not growing rental profit much.

BWP said it expects the FY22 distribution to be similar to FY21. Reliability is useful in the shorter-term, but I’m looking for ASX dividend shares that are growing their payouts in the longer-term.

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