This article is from the Australian Property Journal archive
The still tightly held Melbourne property group Becton returned net profit after tax of $16.1 million for the first half to 31 December 2006 with the share market reacting with a five cent price drop.
While Becton’s results were a marked improvement on its first half result for the previous period, many analysts believe the company’s share price of $3.54 is way “over the odds” when compared to other listed property companies.
Last year, Becton stapled its property investment company with its development group. It had reached a low of 44 cents before lifting to a high of around 65 cents just prior to the stapling.
One LPT analyst told Australian Property Journal yesterday that Becton’s share price “in consideration of its half year return and secondary property portfolio” was somewhat of an enigma compared to other listed property groups with more assets, greater returns and share prices at or around half the “consideration”.
“Becton seems to many to be extremely overpriced,” the Sydney broker said yesterday. ”The majority of the company is still held by directors so I don’t think we are getting a realistic representation of Becton’s true share price compared to how the company compares to other players in the market.”
“I tend to agree that the figures on Becton at this stage don’t add up,” the Melbourne analyst concluded. Despite its share price, Becton chief executive Hamish Macdonald described Becton’s first half as a stapled entity as a very successful one.
“Becton’s financial result caps a successful half in which we continued to develop our integrated business model,” Macdonald said. “The result provides the Group with a strong foundation for us to deliver the full year forecast.”
Macdonald added that over the year, we have added significant depth to our management team and expertise across the business.
Interestingly, while Becton has some $978 million worth of properties under management the division returned just $9.8 million — or one percent return — in the first half. The group’s development and construction division returned $14.9 million while its retirement division returned $5.2 million.
Becton will not pay a dividend to shareholders in the 2007 financial period.
Becton yesterday closed down 5 cents at $3.54.
Australian Property Journal
