This article is from the Australian Property Journal archive
UGL's real estate services arm DTZ has reported a 27% growth in earnings for the half year ended December 30.
Revenue increased 18% to $1,081.9 million and EBIT grew 27% to $58.3 million.
UGL CEO Richard Leupen said during the half year, the North Asia and UK businesses delivered a strong performance due to increased capital markets and leasing activity.
“The US business also continues to benefit from increased activity in the US corporate real estate and facilities management markets. While European markets remain challenging, signs of increased activity and improving business confidence are encouraging,” he added.
DTZ’s order book stands at $3.4 billion and Leupen said bidding levels for property services are strong and DTZ is well positioned to benefit from the macro trends which continue to support growth in real estate outsourcing and the rationalisation of service providers.
Meanwhile UGL is exploring alternatives to splitting DTZ and floating it on the ASX.
Leupen said in recognition of its obligation to act in the best interests of shareholders, the board will also evaluate unsolicited third party interest received in DTZ to determine whether these indicative proposals are in the best interests of shareholders.
“Demerger preparation continues as our primary approach to ensure that a separation of DTZ and engineering is completed by the end of the 2014 calendar year, subject to regulatory and statutory approvals, including shareholder approval,” he said.
Overall the UGL business reported an underlying net profit after tax of $49.7 million and underlying EPS of 29.8 cents per share.
“Despite the contraction in Australian resources capital spending, UGL’s business model is responding well to the challenging domestic operating environment, given our diverse base of recurring revenues as well as our exposure to global property services, with over half of group earnings now generated offshore.
“When considered together, UGL expects to be at the lower end of previous guidance generating underlying NPAT of around $120 million in FY2014, subject to a continued reasonable trading outlook,” he forecast.
UGL was also forced to defend itself yesterday after The Australian reported that its former property services chief Robert Shibuya accused the company of “cooking of the books by misstating financial results and manipulating employee bonuses so as to deceive investors”
Shibuya is pursuing legal action in a US court, alleging he was sacked for making complaints about the company’s financial statement.
Leupen responded and said “If it is a regulatory [issue] then go to the authorities,”
“There is no substance to it.”
“These claims of financial manipulation and discrimination are completely baseless, and UGL notes that they are made in the context of a claim for monetary compensation for dismissal by a former employee. UGL intends to defend them vigorously.
“UGL is proud of its track record of honesty and integrity and will take all necessary action to defend the claims and is also examining potential counter claims against Mr Shibuya.” Leupen said.
Property Review
