This article is from the Australian Property Journal archive
VALAD Property Group has delivered a strong profit result and big revaluation losses in FY08. And the group admits the year ahead will be tough and has forecast falls in fiscal earnings for FY09.
The group also yesterday announced that Peter Hurley will resume his role as managing director after Stephen Day stepped down due to medical reasons. But Day will remain with the group as an executive director.
Valad has achieved a 123% rise in annual underlying profit which excludes non-items to $169.6 million for the 12 months to June 30, compared with $76.2 million in the previous corresponding period.
Valad’s AIFRS net profit after tax fell 327% to -$248 million from $109.1 million in FY07. This was as a result of asset revaluations and goodwill write-downs which totalled $A248 million for the period.
Distributions for the period were steady at 11.10 cents per security, in line with revised FY08 guidance issued in June this year.
Outgoing managing director Day said the past 12 months have been a torrid time in world property and financial markets.
“This, combined with 14 years of effort since founding Valad in 1995, has taken its toll on my health and as a result the board changes are required going forward,” he added.
Under the new management changes, Trevor Gerber the current deputy chairman will become the independent, non-executive chairman; Hurley who has been based in London for the past 12 months will eventually return to Sydney to be managing director; and Martyn McCarthy will continue his role as CEO Europe.
Hurley said the business review has been a necessary step to ensure that Valad responds effectively to the tough prevailing conditions.
“The conditions that we are all facing have been challenging and we are disappointed not to have met our original FY08 DPS and EPS targets,” he said.
“With no sign that uncertainty in the financial and property markets will ease anytime soon, we have taken a very conservative view of the future, and have begun a process to re-set the business so that growth can be achieved from today,” he added.
Day said he sees no benefit in taking a bullish view of earnings in FY09.
“We have also adjusted our distribution policy to pay out 75% of underlying earnings to better match our cash earnings over the coming year.
“The FY09 guidance represents our conservative view of reliable earnings that we expect to achieve this year. This is obviously formed on the basis that market conditions remain under stress but do not suffer a material deterioration,” Hurley added.
Valad expects fiscal 2009 net profit in the range of $A115 million to $A145 million, which translates to earnings per security of 7.00 to 9.00 cents and distributions per security of 5.25 to 6.75 cents.
Hurley said this will be a year of consolidation for Valad.
“We plan to capitalise on our solid business platform in Asia Pacific and Europe.
“We will continue to maintain our prudent approach to capital management and keep gearing at the low end of our target range to ensure that Valad is ready to move when appropriate opportunities arise and when market conditions stabilise and improve,” he concluded.
Valad shares rose 4 cents higher to close at 47 cents.
Australian Property Journal
