Shopping mall owner Westfield Group said first-quarter operations confirm positive signs for the markets in which it operates.
Chairman, Mr Frank Lowy, told yesterday’s AGM in Sydney the company was seeing improvement in retail sales performance in both the US and the UK.
"I said earlier that we are beginning to see more positive signs emerging in the economic fundamentals in the markets in which we operate, and the results from our first quarter of operations this year confirm this better outlook," Mr Lowy said.
"We saw continued strong results from the Australian portfolio and are now seeing improvement, in retail sales performance in both the United States and United Kingdom.
"We recently announced our decision to expand our development program for the current year to around 1 billion dollars of new project starts, effectively reversing the decision of a year ago to put new projects on hold.
"This will involve some 800 million dollars of new projects in Australia this year, and a number of smaller projects in the US valued at 200 million US dollars."
Westfield also reaffirmed its plans for a 2010 distribution target of 64c a security, equal to about 70% to 75% of operational earnings.
Mr Lowy again explained that Westfield had previously paid out 100% of operational earnings and "the decision to reduce the level of the Group’s distribution was not taken lightly".
"However the Board decided and announced last year that a prudent way of funding our extensive development program, at least in part, was to retain part of our earnings each year – for that purpose."
The securities rose 2.4%, or 29c, to $12.33 yesterday.
It remains well under its all time peak of $23.41 hit in February 2007 and well below the $14.66 close on its first day of trading back in 2004.
That’s despite the rise in earnings since then.
Of course the billions of dollars raised in new issues in 2007-09 have pressured the share price.
Sydney based funds manager and trustee, Perpetual, told the market yesterday that it now expects to more than double its full year net profit in 2009-10.
But it also reminded us of just how exposed the group remains to market movements when it warned that the sharp fall in share prices so far this month cut the amount of funds under management.
In a letter to shareholders, chairman, Bob Savage, said Perpetual now expects to deliver an annual after-tax profit of between $85 million and $95 million for the 2010 financial year, assuming no impairments in its Exact Market Cash Fund or other significant items.
Perpetual’s shares fell, and then rose 35c to $30.18 after investors considered the update.
The forecast 2010 profit is more than double Perpetual’s 2009 result, when the market slump cut net profit 71% to $37.75 million, from $128.81 million earned in the 2008 year when the market peaked.
"Subject to there being no dramatic deterioration in financial markets and business conditions over the remainder of the financial year (ending on June 30), we expect our second half year underlying profit to be broadly in line with our first half results," Mr Savage told shareholders.
The full year 2009-10 underlying profit is expected to be between $65 million to $75 million, including the impact of acquisitions, but excluding gains or losses on the sale of investments and gains from the Exact Cash Fund generated from improved credit markets.
"We are in a strong financial position and in good shape to pursue our strategy to be the leading provider of wealth management services to financially successful investors and their advisers, and to be the leading corporate trustee," Mr Savage wrote.
"The sharemarket rallies from their March 2009 lows increased our revenue from the funds we manage and the clients we advise, and the gradual thawing of markets for residential mortgage backed securities has brightened prospects for this mainstay of our corporate trust business."
Perpetual will continue to pay dividends and will retain its dividend payout ratio at between 80% and 100% of after-tax profit.
Falling equity markets in May would have an impact on FUM balances, which reached $29 billion at April 30, up 11% on the June 30, 2009 balance.
Funds under advice, including increases from acquisitions, were up 28% at $8.7 billion at April 30, but securitised funds under administration fell 11% to $215 billion compared to the June 30 balance.
