Australand signals stronger half after 9% drop
The diversified developer, which has been the subject of takeover speculation since December, reported a 9 per cent drop in net profit to $62.4 million for the six months to June 30.
The result was influenced by the timing of housing sales. In the current half about $330 million of sales are due to be settled, which will boost full-year profits.
After one-off items, Australand reported a 1 per cent decline in statutory profit to $88.4 million.
An interim distribution of 10.5¢ per security was declared and will be paid on August 7. The group expects to pay a distribution of 11¢ for the second half.
Australand was taken off the market this week after its major shareholder, CapitaLand, said it would retain its stake following a review of the business.
Managing director Bob Johnston told analysts that while the takeover process - started last year when GPT made a conditional bid, which was rejected - had created uncertainty, "it's now behind us".
He said the dip in earnings was a timing issue related to the residential business and forecast a stronger second half with a full-year growth of 3 to 4 per cent. The residential/development business reported a 35 per cent drop in earnings in the first half to $22.3 million.
Mr Johnston said full-year earnings from residential were expected to be similar to last year's.
In contrast, the investment division had benefited from long leases and high occupancy, which generated recurring income. The division reported a $17.2 million rise in property valuations.
"Despite business and consumer confidence continuing to be fragile, residential sales activity strengthened during the first half, with contracts on hand up 36 per cent," Mr Johnston said.
While conditions for the industrial and office portfolio were expected to be flat, he said there had been some rental growth from the completion of development projects.
Frequently Asked Questions about this Article…
Australand's 9% fall in net profit to $62.4 million was largely a timing issue in its residential business — many housing sales were not settled in the first half. The company said about $330 million of sales are due to settle in the current half, which should boost full‑year profits.
For the six months to June 30 Australand reported net profit of $62.4 million (down 9%). After one‑off items the statutory profit declined by 1% to $88.4 million.
Yes. Australand declared an interim distribution of 10.5 cents per security, payable on August 7. The group also expects to pay a distribution of 11 cents per security for the second half.
Management expects a stronger second half as residential settlements come through and is forecasting full‑year growth of about 3–4%.
The residential/development business reported a 35% drop in first‑half earnings to $22.3 million, driven by the timing of sales. However, contracts on hand were up 36%, and management expects full‑year residential earnings to be similar to last year once settlements occur.
Australand had been the subject of takeover speculation since December, including a conditional bid from GPT that was rejected. This week the company was taken off the market after major shareholder CapitaLand said it would retain its stake following a review. Managing director Bob Johnston said the takeover uncertainty is now behind them.
The investment division benefited from long leases and high occupancy, generating recurring income. It also reported a $17.2 million rise in property valuations.
Management expects conditions for the industrial and office portfolio to be broadly flat, although there has been some rental growth from the completion of development projects.
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