This article is from the Australian Property Journal archive
TRAFALGAR Corporate Group has joined the ranks of property trusts losing the battle against the global financial crisis.
Trafalgar has reported an interim operating profit of $1.7 million for the six months to December 31 2008, down 58.5% from $4.1 million recorded in the same period last year.
Chief executive Braith Williams said the decline in revenue and operating profit was directly attributable to the wind down of development division activities.
He confirmed the previous guidance’s interim distribution of 5.0 cents per security.
The company booked an after-tax loss of $33.2 million for the period, after recording writedowns of $34.9 million. The interim basic loss for the period per security was 38.9 cents and net tangible assets as at December 31 2008 were $1.85 per security, compared to $2.26 per security as at June 30 2008.
“The pre-tax loss of $33.2 million reflects the impact of the ongoing financial crisis on the Australian property markets. This has resulted in revaluation losses of $14.9 million on our commercial and industrial investment properties, a $12 million loss as a result of mark to market on hedge contracts and write-offs of $8.0 million associated with the development portfolio, write-off of goodwill and the carrying value of joint venture activities.
“Our efforts are focussed on realising funds tied-up in development activities and continuing the transitioning of the Group to become a pure investment property vehicle,” he added.
Williams said the diversified investment property portfolio is expected to continue to deliver a solid rental income stream with only two small lease expiries falling due during the next 12 months.
The group will continues with its strategy of withdrawing from property development with a view to becoming a pure investment property vehicle.
Trafalgar will also be pursuing, in an orderly manner, a number of strategies in relation to its investment property portfolio.
One of the strategies may include the de-stapling of Trafalgar’s property trusts (Trafalgar Opportunity Fund No 4 and Trafalgar Platinum Fund No 12) from the group’s development vehicle (Trafalgar Corporate Group Limited).
Australian Property Journal
