Rural Funds Group (ASX: RFF), an agricultural Real Estate Investment Trust (REIT) that owns a diversified portfolio of Australian agricultural assets, today released its Financial Statements for the year ended 30 June 2026 (FY26). The company, managed by Rural Funds Management Limited, reported a substantial increase in earnings, reaching $124.1 million, or 31.8 cents per unit (cpu). This figure represents a $103.8 million rise compared to the prior year, primarily attributed to the contracted sale of assets above book values and mark-to-market adjustments of interest rate swaps.
Net property income for FY26 stood at $100.5 million, marking a 5.7% increase. This growth was driven by additional rental income stemming from capital expenditure, notably in macadamia orchards, and lease indexation. Adjusted funds from operations (AFFO) were 11.7 cpu, aligning with forecasts, and distributions per unit (DPU) were also 11.73 cents, consistent with projections. The Adjusted Net Asset Value (NAV) climbed to $3.22 per unit, an increase of $0.14 cpu or 4.5%, largely due to property revaluations and interest rate swap valuations. Looking ahead, RFF forecasts AFFO and distributions of 11.7 cpu for FY27, representing a 100% payout ratio.
In terms of portfolio strategy, RFF completed divestments totalling $314.9 million, achieving an average 18% premium to prior book values. These sales included six properties and associated water entitlements, reaffirming asset values and providing capital for future expenditures. Consequently, the group’s pro forma gearing reduced to 31.8%, comfortably within its target range of 30-35%. RFF also outlined plans for staged development of two properties in FY27, focusing on macadamias and irrigated cropping, to generate future AFFO. The projected FY27 capital expenditure of $46.7 million is fully funded, supported by a pro forma bank debt facility headroom of $300.8 million, further strengthening the company’s financial position and long-term WALE of 14.8 years.
