Rural Funds FY26 slides: asset sales lift NAV, earnings flat

Rural Funds Group reported its financial results for the fiscal year ending on August 21, 2026, on August 21, 2026. Despite strategic asset recycling and balance sheet improvements, the agricultural property REIT saw flat earnings growth. The company's adjusted net asset value increased 4.5% to $3.22 per unit, primarily due to asset sales at significant premiums.

Shares rose by 0.46% to $2.17, near the upper range of their 52-week trading band. The portfolio, valued at $1.8 billion, encompassed cattle, macadamias, almonds, cropping, and vineyards with an average lease expiry of 14.8 years. Rural Funds maintained a stable cash earnings figure of $45.4 million or 11.7 cents per unit, matching guidance.

The payout ratio was 100.6%, marking the third consecutive year of improvement. However, the company projected unchanged earnings for FY27. Net property income grew 5.7% to $100.5 million, while net farming income rose slightly to $3.3 million. Earnings were boosted by asset sales, asset revaluations, and favorable interest rate swaps.

Debt repayments were supported by a 3.9% average passing yield on FY26 sales. The company's strategic asset sales totaled $314.9 million, reducing debt and enhancing balance sheet flexibility. The sale of the Rewan cattle property, at a 46% premium to book value, yielded a 22% internal rate of return. Pro forma gearing fell to 31.8% from 39.8%, positioning the company within its target range.