Mirvac chief insists profit dive no motive for his exit

He also slashed distributions to shareholders in a bid to bring payouts into line with reduced earnings, in what is a tough environment for property stocks.

He will hand over the top job to Mirvac's executive director, Nick Collishaw, on August 26, suggesting that the 24 per cent earnings decline may have been a clearing of the decks before Mr Paramor's replacement takes over.

In a statement from Mirvac yesterday, Mr Paramor denied that change at the top was a recent decision in the wake of the property sector rout. "Late last year I initiated a discussion with [Mirvac's chairman] James MacKenzie informing him of my intention to retire, allowing a window to select my successor.

"It was not an easy decision to make, nor has it been since the deterioration in the market, however, it is now an appropriate time for me, my family and Mirvac," he said in the statement.

Mr Collishaw said that Mr Paramor's departure was timed to coincide with a strategic review, which was completed last week. "The two events [the downgrade and the departure] are not linked in any way. It was actually around completing our strategic review of the business which we presented to the board last week. Myself and Greg have been intimately involved in the strategic review for Mirvac, and with that now in its final form the timing was right for Greg," Mr Collishaw said.

He said his intimate knowledge of the review and his close work with Mr Paramor over the years meant a lengthy handover was not needed.

"We're well placed, with over $1 billion in undrawn facilities. We are getting our business back to basics and simplifying our business model," he said.

Mr Paramor and Mr Collishaw joined Mirvac in 2005 via its acquisition of James Fielding Group, with Mr Paramor becoming managing director.

Last week Mr Paramor announced profits would fall by 24 per cent this financial year, while distributions to investors would be slashed by 39 per cent in 2008-09 to a forecast payout level of 20c a unit, down from this year's distribution of 32.9c a unit.

The fall is based on profits falling from a preliminary estimate of $352 million for the financial year just gone to between $268 million and $292 million in 2008-09.

Mr Paramor said the cut in distributions was based on the need to match distributions to the earnings from the underlying listed trust structure. "We believe in this current environment you go back to basics," he said.

The forecast cut in profit recognises the difficulties facing Mirvac's development and funds management businesses in the absence of cheap debt.

Mirvac shares, which started the year above $6, ped 15c to $2.30 yesterday.