Business Description:
Abacus Property Group (ABP) is a stapled security, which combines two companies; Abacus Group Holdings Limited and Abacus Group Projects Limited, and two trusts; Abacus Trust and Abacus Income Trust, having listed on the ASX at $1.10 per unit in November 2002. The business is principally a property investment and funds management group with interests in property finance, joint ventures and development.

Strategy Analysis:
ABP is a fundamental property investor, acquiring properties on balance sheet for active asset management and later recycling into funds management vehicles providing both high margin transaction fees and replacement annuity style fee revenue. ABP has a strategy to target balance sheet exposure of 70% direct property assets and 30% from funds management and property ventures. The Groups strategy implementation is flexible to the point of being opportunistically responsive but remains limited by capital availability given lower quality property assets. Abacus Property Group reported NPAT down 32% to $17.35m for the year ended 30 June 2011. The reduction was largely due to the restructuring of its investments in a number of its unlisted retail funds and other investments during the period. Revenues from ordinary activities were $201.01m, up 55% from last year. Diluted EPS was 4.66 cents compared to 7.65 cents last year. Net operating cash flow was $122.49m compared to $64.61m last year. The final dividend declared was 8.25 cents, taking the full year dividend to 16.5 cents compared with 3.15 cents last year. The announced strategic review of funds management will determine if the Group's long term return model is compatible with the passive investment preferences of the unlisted retail sector in addition to identifying ways to free up the Group's capital invested in its unlisted retail funds.