This article is from the Australian Property Journal archive
In his time as the head of property group Mirvac managing director Greg Paramor has, according many, not set the world on fire. Many property pundits considered Paramor may not have been the right head for the job following the departure of founder Bob Hamilton back in 2005.
Wrong!
Paramor has performed were it matters delivering shareholders continued growth and diversity.
Yesterday, Mirvac Group reported a net after tax profit of just over $208 million for the first half to 31 December 2006 with after tax operating profit of $152.2 million up 11.8% on the corresponding period in December 2005.
The half year distribution of 15.95 cents per stapled security increased just 2.9% on the previous half underpinned by earnings per security for the period of 16.42 cents – excluding non-cash AIFRS items.
Paramor said yesterday that Mirvac’s integrated business platform is now delivering sustainable growth and there are clear examples of each division working together to facilitate major acquisitions, developments and the recycling of capital through funds management.
Paramor believes Mirvac’s business platform was best illustrated through the recent acquisition of the Walker portfolio, which delivered assets for investments, developments and funds management.
“Our diversity and collaborative approach is an important aspect of managing of different property cycles, and ensuring we have a strong pipeline of activity to grow recurrent earnings across the group,” Paramor added.
The $1.124 billion Walker Corp acquisition includes $314.0 million of investment assets including a 50% interest in two leading retail centres in Sydney – Broadway and Rhodes; $578.5 million non-residential development projects with an acquisition value of $167.0 million; and around 1,400 medium density and land subdivision residential lots with an acquisition price of $111.6 million and total project value of $950.0 million.
The deal is still being digested by many property analysts, who remember Walker Corp’s sellout a decade ago to Australand.
Mirvac also bought the Carlton Hotel portfolio with BOS International for $328.3 million, which comprises four 4 to 4.5 star hotels in Brisbane, Sydney, Parramatta and Melbourne, as a seed for Mirvac’s Wholesale Hotel Fund.
Paramor said integrating Walker’s portfolio and the Carlton Hotels under the Mirvac umbrella was running to plan and schedule.
“We look forward to seeing the benefits of these significant acquisitions, which will add to sustainable earnings growth going forward. As we have previously stated our business model is better investment and transactional based, and Mirvac is well positioned for the financial year of 2007 and beyond.”
Mirvac reaffirmed its previous EPS and DPS guidance of 31.9 cents for the current financial year. Delivery of earnings is anticipated to be in line with Mirvac’s stated strategy of Investments 60–65%; Developments 25-30%; Funds Management 5-10%, and Hotels 5%.
Mirvac currently has in excess of $24.7 billion of assets under control across the investment, development, hotel and funds management spectrum. This includes investments in more than 62 properties covering the retail, commercial, industrial and hotel sectors with a total portfolio value of $3.8 billion.
Mirvac finished the day down four cents at $5.85.
Australian Property Journal
