Like Stockland, AV Jennings (AVJ) and Boral (BLD), Mirvac (MGR) has confirmed it rode the housing boom very nicely and very profitably in the six months to December 31.
The company told the ASX yesterday that statutory profit after tax surged to $472.7 million from $279 million. And the company reaffirmed its full year 2016 operating earnings guidance range of 12.7 cents to 13 cents per stapled security and its distribution guidance range of 9.7 cents to 9.9 cents per stapled security.
Mirvac chief executive Susan Lloyd-Hurwitz has cautioned over slowing residential property markets in Australia but expects strong earnings from Mirvac’s own housing division in the second half.
"While the residential market is now set for a lower volume and price growth phase, the markets Mirvac operates in continue to be supported by positive fundamentals, particularly Sydney," Ms Lloyd-Hurwitz said.
"While the property markets generally continue to improve, the overall domestic economy is performing at a sub‑trend pace."
Operating profit of $164.6 million down from $201.8 million due to asset sales in the previous period, however the group says it is on track to deliver a stronger second half result driven by sales in residential property.
Mirvac said it sold 1960 lots reflecting the continued momentum of Masterplanned Communities projects in Sydney and Melbourne, and Apartment projects in Brisbane, and is on track to deliver over 2900 residential lot settlements for the 2015-15 financial year.
Overall development earnings were down reflecting significant skew of residential property settlements to the second half of 2016 (a common factor for the company in recent years).
Mirvac however says it has already secured 88% and 73% of expected full year 2016 and full year 2017 development earnings before interest and tax respectively, driven by record level of residential pre-sales.
“We expect a significantly stronger contribution for the development business in the second half of FY16,” Ms Lloyd-Hurwitz said in yesterday’s ASX release.
