The annual results of Stockland (SGP), the property developer, seem to have come in without some of the losses and lower profits reported by other companies reporting yesterday in Newcrest (NCM), Ansell (ANN) and Aurizon (AZJ).
Stockland reported a sharp lift in its full year profit, due to improvements in the property market and the impact of a major write-down in the 2012-13 results.
The company posted a net profit of $527 million in the year to June 30, up from $105 million a year ago, which was cut by a $355 million write-down to the company’s residential assets.
Underlying profit, which excludes the impact of the write-down, was up a more accurate 12% to $555 million.
Operating profit before tax and interest improved to $602 million, in line with market forecasts of $601 million.
Stockland said its underlying earnings per security growth of 7.1%, exceeded previous guidance.
Distribution for the year was steady at 24c per security, in line with underlying earnings and funds from operations per security (a property industry measurement) were 24.8c up 16.4% on 2012-13.
SGP 1Y – Stockland lifts FY profit
Stockland Managing Director and CEO Mark Steinert said in yesterday’s statement the company’s "solid performance reflected the Group’s focus on successfully implementing its growth strategy as well as positive residential market conditions".
"Throughout FY14 we have focused on our core strategic priorities of growing our assets and customer base; capital strength; and operational excellence. This strong result demonstrates our approach is working and Stockland is now well positioned to deliver sustainable earnings growth.
"Our core businesses performed solidly with year on year profit growth in Retail, Residential, Logistics and Business Parks, and Retirement Living,” Mr Steinert said.
In a later briefing Mr Steinert says the coming year will be characterised by "greenfield" developments and the acquisition of assets in the residential, apartments and mixed use projects, as well as the faster growing business parks and warehouses.
Development of housing near or in shopping centres, depending on planning and land availability, was also on the agenda, he said.
He forecast a 6% to 7.5% rise in earnings in the current year, but said he expected the pace of house price growth rates to slow after the last few strong years.
Stockland made a capital profit of $80 million on its brief foray into takeover dealing with Australand, which fell to the Singapore company, Frasers Centrepoint.
Yesterday, Mr Steinert Stockland "will reinvest this profit prudently into our growth strategy".
"We have been disciplined with our investment in Australand and as a result have achieved a significant profit that we will prudently reinvest in our growth strategy.
“In particular, we will accelerate our expansion into medium density residential and mixed use development, grow our Logistics and Business Parks capabilities, invest in community and our people and accelerate planned system and process enhancements,” Mr Steinert said.
Stockland securities rose 0.7% yesterday to $4.17.
