AFTER six tough years, Federation Centres, the redesigned Centro Properties, has returned to a credit rating of A- from Standard & Poor's and is talking acquisitions and a simplified structure.
In its report for the first half of the 2008 financial year, then chief executive Glenn Rufrano spent the time talking about the $14 billion of debt the retail landlord was facing and that it was his task to keep the banks from foreclosing.
After much pain, legal action and asset sales, Mr Rufrano was successful. A year ago, Steven Sewell assumed the chief executive's role and this week said the group was on track to report solid earnings for the 2013 full year.
But underpinning the hard work of settling a multibillion-dollar class action, reorganising staffing and changing the name, was the business, being food-anchored small and medium shopping centres. While the head office was burning the midnight oil to keep debt under control, the malls opened daily as customers bought their food and discretionary items.
At the group's half-year result on Friday, Mr Sewell said the lifeblood of Federation was and always would be the food-anchored malls.
For the half-year, the profit was $115.6 million, up from $22 million reported in the previous corresponding period. Net income was $115.9 million, from a loss of $100.1 million a year earlier. An interim distribution of 6.6¢ was declared.
Mr Sewell said the outstanding feature of the results was the credit rating.
"Standard & Poor's has assigned FDC a senior secured bank debt, a rating of A- and a corporate credit rating of BBB+. These ratings provide an opportunity to diversify our funding sources via the debt capital markets," he said.
"Focusing on being an Australian-based, food-anchored shopping centre landlord has stood us in good stead.
"We will continue with the strategy of simplifying the structure, development of existing centres as well as looking for joint-venture partners for some of the portfolio."
The scaling down of the syndicates business continues and Federation expects by December 2015 to have only five core syndicates with total assets of about $33 million.
Analysts at Moelis & Co said Federation had upgraded 2013 earnings per security guidance slightly to 15.5¢-15.75¢.
"We anticipate upgrades to consensus for both 2013 and beyond and the core earnings of $106.2 million were in line with our estimates," the analysts said.