Gladstone Land(US:LAND)2021-02-25 18:54Financial Data and Key Metrics Changes - For the fourth quarter, the company reported a net income of approximately $91,000 and a net loss to common shareholders of $2.4 million, equating to $0.10 per common share [23] - The annual adjusted FFO for 2020 was about $14.3 million, a 27% increase from $11.3 million in 2019, with AFFO per share rising to $0.641 from $0.568, a 13% increase [24] - The payout ratio using AFFO was about 84% in 2020 compared to 94% in 2019, indicating improved cash flow management [24] Business Line Data and Key Metrics Changes - Rental income increased by approximately $1.1 million or 8% quarter-over-quarter and by about $12.3 million or 31% year-over-year, primarily due to additional revenues from recent acquisitions [24] - Participation rents for 2020 totaled about $2.4 million, slightly up from $2.3 million in 2019, with expectations for further increases in 2021 [25] Market Data and Key Metrics Changes - The company owns approximately 101,000 acres across 137 farms, valued at about $1.2 billion, marking a significant milestone in farmland ownership [12] - The majority of crops grown are sold to grocery stores, which has insulated the company from downturns affecting restaurants and schools [12] Company Strategy and Development Direction - The company is focused on acquiring farmland that grows healthy food products, with 85% of total crop revenues coming from produce and nuts [34] - The strategy includes a strong emphasis on organic farming, with about 40% of fresh produce acreage being organic or transitioning to organic [35] - The company is also exploring opportunities through a new SPAC, Gladstone Acquisition, to acquire operating assets of farms, which aligns with its growth strategy [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand for agricultural products, particularly fresh produce, which has remained strong during the pandemic [12] - The company anticipates continued growth in the organic sector and views farmland as a hedge against inflation, given its historical performance compared to other asset classes [35][38] - Management does not expect significant lease terminations in 2021, indicating stability in the agricultural sector [62] Other Important Information - The company raised its monthly dividend to $0.04495 per share, marking the 21st increase in 24 quarters, reflecting a commitment to returning value to shareholders [30] - The loan-to-value ratio for total farmland holdings was about 53% as of December 31, indicating a conservative leverage position [28] Q&A Session Summary Question: Current pipeline and deal flow for 2021 - Management indicated a strong pipeline with about $250 million worth of potential acquisitions, expecting to close on approximately 80% of that [33][45] Question: Funding acquisitions and stock performance - Management plans to blend funding sources, including preferred stock sales and ATM programs for common stock, without major common stock offerings anticipated [51] Question: Competition in the acquisition market - Management noted no new significant competitors entering the market, with the same group of institutional investors remaining active [60] Question: Expectations for lease terminations in 2021 - Management does not foresee large lease terminations, citing the agricultural sector's resilience during economic downturns [62]