Rural Funds Group (RFF) reported adjusted funds from operations (AFFO) of AUD 45.4 million, or AUD 0.117 per unit, for the fiscal year ended June 30, 2026, matching prior guidance. Net asset value (NAV) per unit rose 4.5% to AUD 3.22 from AUD 3.08 a year earlier, driven by asset sales and portfolio revaluations.
The group maintained its FY27 AFFO guidance at AUD 0.117 per unit despite headwinds from lower macadamia prices and dry seasonal conditions in Central Queensland. Total distributions for FY26 were AUD 0.1173 per unit, with FY27 forecast at the same level, implying a 5.4% yield based on a closing share price of AUD 2.18. The payout ratio improved to 100.6%, the third consecutive year of increase.
RFF executed AUD 315 million in asset sales during FY26, including six properties and 8,754 megaliters of water entitlements, at an average premium of 17.9% to prior book values. Cattle property sales accounted for AUD 234 million at a 25% premium, while water entitlements fetched AUD 74.4 million. The portfolio’s independent valuations, covering 60% of assets, showed a minor 0.5% decline, offset by gains from contracted sales.
Leverage metrics improved, with pro forma gearing falling to 31.8% from 39.8% at June 30, 2025, entering the target range of 30%–35%. Interest-bearing liabilities declined to AUD 607 million, and undrawn debt headroom expanded to AUD 301–308 million. The weighted average cost of debt eased to 4.69% from 4.79% in FY25, with 82.3% of debt hedged or fixed.
Operational challenges included a drop in macadamia prices to AUD 3.80 per kilo from AUD 4.25, pressuring orchard leasing conditions. Dry conditions in Central Queensland reduced dryland crop yields, while cotton properties exceeded forecasts. Development projects such as Rookwood Farms and Kaiuroo Stage 2 progressed, with Stage 3 set to begin shortly to target FY28 AFFO contributions. Autonomous tractor trials were successful, with plans to expand deployment in 2027.
RFF’s share price traded near the top of its 52-week range at AUD 2.18, with a P/E ratio of 13.4 and a price-to-book ratio of 0.78. The group reported AUD 124 million in earnings, including non-cash asset revaluations, and net property income rose 6% to over AUD 100 million. Capital expenditure totaled AUD 116 million in FY26, with forecasts of AUD 47 million in FY27 and AUD 30 million in FY28.
