As demonstrated by Farmland Partners’ third quarter report, the company has seen significant growth in 2015 in terms of revenues, profitability, farmland assets, and dividends paid to shareholders. The company’s CEO Paul Pittman explained, “We have built the company infrastructure so we can continue to increase scale without materially increasing SG&A… We run a very efficient business model with only 12 employees.”
Third quarter investment activity resulted in 2,694 acres purchased through three separate deals in Arkansas, Mississippi, and Michigan for a total of $14.4 million. More recently, on November 9th 2015 the company acquired 22,300 acres spread over 120 farms in Illinois. This $197 million investment was financed with $50 million in cash, and $30 million in common stock and limited partnership interest in the company’s operating partnership, and $117 million in preferred operating partnership units.
Of this deal, Pittman says, “This farmland acquisition, one of the largest ever, will be a landmark transaction for us, increasing our acreage from approximately 74,400 to nearly 100,000…The seller has accumulated, over decades, a portfolio of some of the best farmland in Illinois. On top of the benefit of scale, the transaction will strengthen our balance sheet from the financing structure that provides us with a low cost, long-term preferred equity… this transaction [is] expected to generate over $6 million in revenue annually, without adding a single employee."
Into the fourth quarter, the company has also closed on a $5 million acquisition of 1,229 acres in Nebraska and Georgia, and entered into contracts for an additional 2000 acres at a purchase price of $4.4 million.
Some key third-quarter metrics include:
- $281 million in land assets, up 85% from year-end 2014.
- $42.5 million in cash, up 26% from year end 2014.
- $9.2 million in 2015 revenue, up 350% from the first nine months in 2014.
- $5.2 million in operating expenses, up 240% from the first nine months in 2014.
- $492 thousand in net income available to stockholders, up 96X from year end 2014.
- AFFO/share of $0.11, up 100% from third quarter 2014.
The third quarter dividend amounted to $0.1275/share. Annually this dividend equates to $0.51/share, or 5.06% of the company’s closing stock price on November 9th, 2015.