GPT GROUP has delivered on its promise to sell all non-core assets and focus on boosting its office, retail and industrial property portfolio.
Net profit fell to $246.8 million after taking into account a one-off loss on derivatives but operating earnings were 7 per cent higher at $438.8 million. The gains allowed the country's largest diversified real estate investment trust to declare a higher annual dividend.
Property analysts said the operating results were about 1.2 per cent above expectations thanks to the better than expected price last year for the Ayers Rock Resort, which was the last of the earmarked non-core assets to be sold.
GPT's chief executive, Michael Cameron, forecast operating earnings per security of at least the rate of inflation plus 1 per cent for the full year, and will maintain a distribution payout ratio of no less than 80 per cent.
Bank of America Merrill Lynch said GPT's core income growth would be based on structured rent increases and high occupancy, across its divisions, combined with cost management and lower debt costs.
"We are pleased to under-promise and over-deliver," Mr Cameron said. "The market outlook is impacted by a combination of headwinds and tailwinds. The outlook for the retail sector remains subdued in 2012, impacted by ongoing global market uncertainty and reduced consumer confidence."
The sale of GPT"s half share in the $750 million MLC Centre was not imperative and "if it doesn't sell, we still get the rent", he said.
The prime assets for the overall office sector continued to perform well, Mr Cameron said.
"While there are concerns about pressure on the financial services sector, the impact on GPT is expected to be limited due to our low expiry profile of around 8 per cent over the next two years," he said. "The outlook for the industrial market is more positive, with limited supply and low vacancy supporting performance."
AT A GLANCE
FULL YEAR % CHANGE
Revenue $843m 1%
Profit $246.6m -65%
EPS 22.4? 8.1%
Dividend 17.8? 9.2%
Share price: $3.12 ( 4?)