This article is from the Australian Property Journal archive
RESIDENTIAL developer GEO Property Group has posted a first half net profit after tax of $10.3 million, up 24% thanks to the resilience of the company’s affordable house and land business strategy.
The group has also declared a distribution of 1 cent per security after achieving net operating cash flows of $9.7 million for the half year.
The improved net profit was achieved despite a 53% decline in revenue to $69.7 million as a result of the sale of non-performing assets in the previous half year to reduce debt. The sales included total settlements of 223 lots at an average gross margin of 22% with $27.8 million of sales achieved that will not be recognised as revenue until the second half of the financial year. At the end of the half year the group had a pipeline of 4,279 lots.
Executive director Guy Farrands said the result was achieved despite increasing interest rates and December’s wet weather in Queensland and was a testament to the resilience of the company’s business model that focuses on affordable housing and land.
“Trading conditions during the first half were very challenging for the whole industry,” he said. “We stayed focused on our value for money products in affordable markets.”
The group’s look-through gearing at 31 December 2010 was 20%, compared to 26% at the 30 June 2010, while NTA at 31 December 2010 was 35.8 cents per security, compared to 34.9 cents per security at 30 June 2010.
Australian Property Journal
