This article is from the Australian Property Journal archive
RAPTIS has warned there is going concern over the ability of the group to continue if it does not secure financier support.
A slowdown in revenue growth, increase in costs and asset value write downs has stopped Queensland property group Raptis from delivering a back to back profit result.
Raptis has reported a net loss of $13.9 million for the year ended June 30 – a complete turnaround from a profit of $12.98 million in 2007.
The group’s profit excluding the $20.5 million write down in investments was $6.5 million, which is an improvement over last year’s $5.14 million. This was despite revenue falling from $318.98 million a year ago to $264.99 million.
Director James Raptis said the company has historically financed its development projects on a short term basis as a development site moves through the various stages of approval until construction finance is appropriate.
“Our corporate funding model depends on debt funding and proceeds from sale of developed property to meet the carrying costs of property held for future development. The debt market has contracted severely during the last six months.
“But the recent shortfall in liquidity in world finance markets has impeded this process,” he added.
“The directors are in negotiations with the group’s major bankers and expect the current term loans will be extended or replaced by financiers as required, pending extinguishment from asset sales and completion of the current major Southport Central and Hilton Surfers Paradise Hotel and Residences projects.
“Whilst the directors believe our funding partners will continue to work with us to complete the existing projects and maximise the return on the development sites held, the ability of the group to continue as a going concern and realise assets in the ordinary course of business, is dependent upon the continued support of the group’s financiers,” Raptis added.
The group currently holds $496 million in current assets and $765 million in current liabilities, including $669 of interest bearing debt. This includes $87 million in loans that are not due for settlement with 12 months however are classified as current as it has been decided to sell the underlying asset. Net assets are positive at $10 million.
Development inventories are recorded at cost, at current valuations however the balance sheet would reflect net assets of $110 million.
Raptis said has undertaken a review and has prepared an asset sell down strategy to reduce debt and provide working capital funding.
This includes selling of miscellaneous investment assets, residual development assets and Joint Venture development.
The group has declared a dividend of 5 cents for the year.
Raptis shares closed unchanged at 80 cents.
Australian Property Journal
