This article is from the Australian Property Journal archive
Despite another challenging year, City Pacific has posted a net profit after tax of $62.1 million (before AIFRS adjustments) for the year ending June 30, 2006 – an increase of 6.5% over $58.3 million in 2005.
CIY’s chief executive Phil Sullivan said 2006 was another challenging but rewarding year with the increase in profits extremely pleasing. The result marks the fifth consecutive increase in NPAT delivered since listing in 2001.
“City Pacific aims to deliver both growth and yield to investors. This last year has seen significant one off expenses that have impacted on our bottom line, but we still managed to deliver a record profit,” he added.
The group’s revenue for the 2006 financial year was $324.9 million – up from $166.2 million in the previous year.
CIY’s funds management division contributed $45.5 million to the NPAT from revenue of $135.3 million. Combined funds under management in the City Pacific Mortgage Trust, City Pacific Income Fund, City Pacific Managed Fund and City Pacific Private Fund rose to $1.081 billion, up 13% on last year.
“Our funds management division continued to provide City Pacific with a strong revenue stream to leverage into funding opportunities, predominately in the buoyant high growth South East Queensland residential market and to a lesser extent in the Victorian market,” Sullivan said. “Less than 7% of our book is currently exposed to the New South Wales market.”
Meanwhile, CIY has become one of Australia’s largest non bank lenders during the 2006 financial year, growing its mortgage assets under advice or management to in excess of $5 billion comprising over $1 billion of development funds under management, approximately $1 billion in commercial mortgage assets under management and a residential and commercial loan book exceeding $3 billion.
“The City Pacific Mortgage Trust turns over in excess of 80% of its loan book in development funding each year and has done so for the last 3 years. This enables us to rapidly change the positioning of our portfolio as market sentiments change. We currently write around $2 billion in loans each year across all lending divisions.
“We are confident of accelerating growth in funds under management with increased inflow of retail funds and as co-investment and institutional relationships are further developed,” he added.
CIY’s property division contributed $16.5 million to the NPAT from revenue of $146.7 million. And the group’s residential and commercial finance business delivered $21.9 million in revenue.
“Amidst another soft year for much of the residential market, City Pacific’s Property interests returned an excellent result in line with the group’s expectations.
“The outlook for the property segment remains strong on the back of CP1’s Martha Cove and Braeside projects together with City Pacific’s Townsville International Cruise Ship Terminal project,” Sullivan said.
CIY has declared an total dividend of 45 cents per share.
Sullivan said the group aims to maintain a dividend of at least 45 cents per annum over the next two years.
“We are confident that as a result of continued profit growth this dividend will reflect a dividend payout ratio of 75% within two years. We expect to see this performance reflected in the company’s share price,” he concluded.
City Pacific shares closed 20 cents higher at $4.37.
By Kathryn O’Meara
