This article is from the Australian Property Journal archive
Like a ship slowly turning in the night against a great tide, Multiplex has all but turned its back on the horrendous woes of its Wembley debacle – now its just has to finish the job.
But yesterday the good news for investors was that Multiplex reported a first half profit thus ending losses on the Wembley project — all be it on the back of massive revaluations.
While it is not far off finishing the Wembley Stadium, the company told shareholders that it could report a net after tax profit of $295.6 million for the six months to December 31, compared with the $119.6 million loss in the corresponding period last year.
Profits attributable to revaluations made up $245 million of the net after tax profits for the six months.
Multiplex’s development division contributed EBIT of $22.6 million — down $7 million on the corresponding period last year –on operating revenue of $148.8 million. Operating revenue in December 2005, was however $409.1 million.
The division’s development portfolio now includes 47 projects with a gross development value estimated at $16.2 billion across Australia, New Zealand and the United Kingdom.
The Group’s construction division contributed EBIT of $42.7 million compared to the $375.7 million loss in the corresponding six months in December 2005.
Multiplex’s construction division operating revenue was down slightly to $1.36 billion compared to $1.5 billion in the same period in 2005.
However, directors found positives in those figures stating the first half performance for the construction division was strong with the earnings for the period slightly higher than expected.
Earnings per stapled security of 35.3 cents compared favorably with the 14.3 cents loss in the corresponding period in 2005.
The Facilities Management division contributed EBIT to the Group of $4.3 million on the back of operating revenue was $32.2 million — up around $10 million.
The Funds Management division contributed EBIT to the Group of $9.4 million down from $24.3 million in December 2005.
Total funds under management grew to $6.1 billion.
On the downside, Multiplex late last year entered into an Enforceable Undertaking with the Australian Securities and Investments Commission. The undertaking concludes an investigation by ASIC into Multiplex’s disclosures relating to the Wembley project.
The main component of this agreement provides for Multiplex to make a settlement offer to holders of Eligible Securities up to a maximum of $32.0 million. The $32.0 million has been fully provided for in the period to December 31, 2006.
Multiplex Limited and Multiplex Funds Management Limited also faces a class action claiming unspecified damages. The group intends to vigorously defend these proceedings and no provision for loss had been made as at December 31, 2006.
Multiplex remains in talks with Canadian firm Brookfield Asset Management, however as yet no price has been mentioned or offered. The buyout proposal includes the construction, development and funds management businesses, not the property investment trust, which could lead to a breakup of the company.
The founding Roberts family retains a 25% slice of Multiplex.
Australian Property Journal
