This article is from the Australian Property Journal archive
AUSTRALAND's commercial and industrial and investment property divisions have underpinned a strong half year profit after tax result of $119.6 million for the half year to June 30 2007 – up 34% over the 2006 result of $89.3 million.
As a result, earnings per stapled security rose 25% to 12.9 cents and the group’s net tangible assets per stapled security increased 11% to $1.62.
In the first six months, the commercial and industrial divisions contributed profit of $24.1 million, up 55% over the last year, whilst the investment property division contributed a profit of $118.5 million, including an unrealised revaluation gain of $56.1 million, up 36%.
Together the commercial and industrial and investment property divisions contributed $142.6 million, an increase of 39% over the 2006 half year result of $102.4 million.
The residential property division made a small increase in contributions, up 5% from $32.7 million last year to $34.3 million.
Australand’s acting chief executive John Thomas said the improved performance across all operating divisions and a quality investment portfolio, supports the expectation that the full year 2007 reported profit after tax and minority interest should show an improvement over the previous financial year.
“The commercial and industrial division is expected to continue to achieve strong underlying growth for the 2007 full year. The significant pipeline will continue to provide high quality commercial and industrial properties to the investment property division and to Australand’s managed wholesale property funds.
“The investment property division is expected to deliver recurrent income similar to last year, and an increase in unrealised revaluation gains. Continuing market rental growth and firming investment property yields during 2007 will underpin the value of the division’s portfolio,” he added.
During the year, Australand launched the Australand Wholesale Property Fund No. 6, which has acquired a portfolio of eight high quality commercial and industrial properties from Australand.
Thomas expects the residential division’s geographic diversification to deliver a result similar to 2006, with strong contributions expected from Western Australia and Victoria.
“Whilst there has been some minor improvement in Sydney’s residential market during the first half of 2007, it is expected that this market will remain subdued during the remainder of the year,” he added.
Yesterday Thomas forecast a rise in revenue and profit from Victoria, where the group has 35 projects across land, housing and apartments, which are expected to yield $643 million; $497 million and $421 million respectively, in the next 10 years.
Australand also expects strong profit contribution from WA and Queensland. The land, housing and apartment projects in WA are expected to contribute $1.05 billion, $127 million and $1.26 billion respectively, in the next 10 years.
Whilst QLD’s land, housing and apartment projects are forecast to contribute $119 million, $411 million and $362 million respectively, in the five years.
Thomas said conditions remain challenging in New South Wales. In the next 10 years, land, housing and apartments are forecast to contribute $84 million, $542 million and $679 million respectively.
Thomas maintained the group’s dividends per stapled security of 8.0 cents for the half year. The distributable profit for FY2007 is in line with FY2006, of 16.5 cents per stapled security.
Meanwhile, Bob Johnston, the previous global chief executive of Bovis Lend Lease, will assume the role of chief executive at Australand from August 01 2007, replacing Brendan Crotty who retired from the group on June 29 2007.
Despite the profit increase, Australand shares closed 2 cents lower at $2.28 yesterday.
Australian Property Journal
