Australand Property Group says it expects to increase full-year earnings per share if the current strength in the residential property continues, but warned that its guidance may change if suitor Frasers Centrepoint gains a controlling stake in the company.
Net profit attributable to shareholders rose 49% to $131.5 million in the six months to June, compared to $88.4m in the previous corresponding period.
But revenue fell 15% to $332.1m in the half, compared with $391.5m a year earlier.
Australand will pay an unfranked interim dividend of 12.75c on August 6 to shareholders on the register at June 30.
The property group reaffirmed guidance of a 20 to 25% increase in earnings per share for the full year, but said this may change if Singapore-based Frasers acquires the company and conducts its own review.
Earnings per share are expected to grow by 10 to 15% per year from 2014 to the end of calendar 2016, Australand said, again warning this could change if the Frasers deal goes ahead.
Australand posted $75.7m in investment property revaluation gains, compared with $17.2m a year earlier.
Its residential division increased earnings before interest and tax to $30.7m in the half, compared with $22.3m in the previous corresponding period, with sales activity remaining strong.
Australand reaffirmed its support for the Frasers takeover bid of $4.48 cash per share, which is higher than an earlier all scrip offer from Stockland with an implied price of $4.35 per share.
Australand managing director Bob Johnston said the group's increase in profit showed ongoing strength in the residential sector.
"Residential earnings are up strongly, reflecting favourable market conditions and the performance of key projects during the half," Mr Johnston said.
Activity across Australia's construction sector has begun to expand as interest rates hold at record lows and house building starts to pick up the slack from a fall in mining construction.