APN takes a hit

APN Property Group has blamed poor market conditions in Europe for its 73% fall in first half year profit result.

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APN booked an underlying profit after tax of $1.3 million for the six months ended December 2009 – compared to $4.8 million in the previous corresponding period. The underlying profit before tax was $2 million down from $7 million in the pcp.

APN delivered a statutory profit of $1.8 million which was a 39% improvement from the pcp, due largely to lower impairments from its real estate investments.

APN managing director David Blight said earnings continue to be affected by the decline in market values of real estate securities and direct property that occurred during the global financial crisis.

He said in Europe, where a significant portion of APD‟s fees are earned, the market downturn has affected asset values and the performance of APD‟s managed property funds.

“This in turn, has negatively affected revenues which are linked to the value of the funds managed,”

Meanwhile Blight said in Australia, though revenues are below those of the comparative period, there has been some recovery in the value of APD‟s real estate securities funds and there are indications of a strengthening market.

The directors have declared an interim dividend of 1.25 cents per share.

Blight said the group is in a position, with no debt and considerable cash reserves.

He added that APN is well positioned to emerge from the market downturn in a strong position.

“Whilst management is intensely focused on organic growth from the underlying investment performance of existing funds, it is also now actively seeking new opportunities.

“The establishment of new funds to meet changes in market demand (such as the APN AREIT Fund, launched in January 2009) and the acquisition of existing fund management businesses that complement existing activities are a strong focus.

“Geographic expansion into Asia is also a real and significant opportunity for the group with a number of possibilities being considered,” he concluded.

Australian Property Journal