This article is from the Australian Property Journal archive
What a difference a year can make. Yesterday, MFS Limited turned around its annus horribilis in 2005 to book a net profit reported under AIFRS of $97.4 million for the year ended June 30, 2006.
Wind back to 12 months ago, the company reported a loss after tax of $2.5 million, had over $330 million in debt, running a ski business which was operating at significant loss as a result of a lack of income and had $14 million in operating cash flow.
Today, MFS has operating cash flow of $55 million, sold but retained the management of the ski business, the Australian Alpine Enterprises Group, to MFS Living and Leisure Group for $110 million and use the proceeds to reduce debt to $59.6 million.
Over the 12 months, the company’s posted earnings of $164.3 million with the investment and funds management division booking $100.6 million; HFA funds management with $10.7 million, Versa Structured Finance with $18.3 million, AAE Ski Fields, $17.6 million and Stella Resorts contributing $17 million.
At June 2006, MFS had $2.9 billion of assets under management with listed property funds representing $ 532 million; unlisted income funds $1,115 million; unlisted property tourism $ 766 million $ 766 million; unlisted property aged care $ 391 million; and other unlisted property $ 158 million.
Yesterday, MFS managing director Phil Adams the company is looking its AUM past the $4 billion mark by July 2007.
In addition, Adams is also looking to broaden MFS’ business internationally. This follows the company’s $120 million purchase of hotel and resort assets owned by Hawaii based Outriggers International.
The 11 resorts in Australia and two in New Zealand with a further six scheduled to open over the next three years will be rebranded into MFS’ Stella Resorts Group.
In addition, Adams has set a new target for the company, giving a profit guidance of at least 30 cents per share for the FY2007.
Yesterday, MFS paid a dividend of 26 cents per share while earnings per share were 43 cents per share.
The company has also decided that with the market capitalisation of MFS Limited and the company’s increased size and position in the financial services industry in Australia, the office of the chief executive will be situated in Sydney by no later than the commencement of calendar year 2007.
MFS Limited will continue to grow the existing substantial number of senior personnel in its Sydney and Melbourne offices in the next two to three years whilst maintaining its administrative headquarters on the Gold Coast.
By Nelson Yap
