FKP pushes merger with residential specialist RVG
FKP Property Group is in discussions with the Retirement Villages Group partners to resolve issues of ownership, in its process of simplifying the structure.
The executive chairman, Seng Huang Lee, said at the retirement and residential specialist's half-year results on Tuesday that management continued to engage RVG stakeholders on restructure opportunities.
FKP has a stake in the listed Forest Place Group and has been trying to merge with the $533 million RVG business to create a pure play retirement entity.
"We think it is in the best interests of all stakeholders to create a single, pure play listed retirement platform," Mr Lee said at an analyst briefing.
"We have alternative options in place with or without RVG and we will pursue those with the intent of creating a stand-alone, pure play listed retirement platform."
He added that discussions were also taking place with FKP shareholder Stockland, which has first right of refusal over some of FKP's retirement assets.
"I've met with the new Stockland chief executive, Mark Steinert, and we continue to explore ideas of working together," Mr Lee said.
For the half year, FKP Property reported an underlying profit of $23.6 million, up 40 per cent on the previous corresponding period, after removing the retirement revaluation component. This was boosted by the commercial and industrial arm and mixed residential earnings.
No dividend was paid and no earnings guidance was issued but Mr Lee said, with the development contracts on hand, there was likely to be a skew to the second half.
After the departure of former chief executive Peter Brown last year, FKP focused on generating cash, simplifying the business, streamlining the reporting structure and reducing expenses.
Mr Lee said a search for a new CEO continued but the priority was to finalise the structure of the group.
"Depending on the final structure, we may need to appoint either one or two chief executives," he said. That would occur if the retirement business was floated off as a separate vehicle.
Goldman Sachs said the first half was ahead of their estimates, largely due to a better than expected performance from the residential division.