This article is from the Australian Property Journal archive
ONE-TIME darling of the LPT sector Mirvac yesterday not only sliced 69% of its previous year's net profit but has also lopped 30% of its staff.
On the back of the result, Mirvac traded steadily losing just one cent down to $2.82 on the trade of more than 3 million shares.
The poor result was foreshadowed several months ago by outgoing chief executive Greg Paramor during the group’s shock July downgrading announcement.
Mirvac’s net profit for the year ended June 30 was $171.80 million, down 69.1% from the previous year. Operating earnings, before certain non-cash and other significant items, was $352.24 million, up 10.4%. The result mirrored Mirvac’s guidance issued in July.
Mirvac also confirmed its earnings per share guidance range of 23 to 25 cents per stapled security and distribution per share guidance of 20 cents per stapled security for the new financial year.
Paramor said that despite turbulent markets, our investment and development divisions were able to produce stable income streams, demonstrating the quality of the investment portfolio and the strong demand for our leading residential products,” Paramor said.
“While we are in a constrained residential market across Australia, investors and homebuyers are continuing to support quality residential developments, as evidenced by our record sales achievements in Queensland and Western Australia,” Paramor added.
“Our results and recent announcements to the market show that Mirvac is a robust organisation that is able to adapt to changed market conditions.”
However, Paramor’s upbeat comments did not reflect Mirvac’s development division’s poor performance which made a pre-tax net loss of $65.8 million, after booking a $219.9 million impairment to the carrying value of its inventory.
Despite Paramor stating Mirvac was a ‘robust’ organisation the company will shed more than 150 of its current 500 strong workforce.
The investment division, comprising Mirvac Property Trust and Mirvac Asset Management, made a pre-tax profit of $404 million for the year. At the end of June, Mirvac’s funds management business had $7.2 billion in funds under management.
Paramor will be replaced by Nick Collishaw as managing director at the end of this month.
Mirvac will make a final distribution of 8.23 cents, up from 7.98 cents in the previous corresponding period.
Mirvac shares fell 1 cent to close at $2.82.
Australian Property Journal
