B&B Wind and Communities profits soar

Babcock & Brown Communities Group and Babcock & Brown Wind Partners Group, which both hold assets in Western Australia, have reported skyrocketing full year net profits today.

The wind power infrastructure satellite fund of Babcock and Brown Ltd reported a 144 per cent leap in annual net profit to $36.77 million and declared a final distribution of 7.25 cents per security.

Revenue rose by 230 per cent to $414.48 million for the year to June 30 compared with the previous financial year.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 164 per cent to $333.7 million.

The second half distribution brings the total fiscal 2008 distribution to 14.5 cents per security, a 16 per cent rise on the previous financial year.

Investors registered with the company as at June 30 will be paid the final distribution, fully tax deferred, on September 18.

BBW own the 90 megawatt Alinta wind farm near Geraldton.

Meanwhile BBC, which owns and develops retirement homes and aged care facilities, reported a net profit of $41.1 million, up substantially from the previous year's $2.6 million.

Total revenue for the group was up from $125 million to $263 million while EBITDA was at $109.1 million.

BBC bought nine Fini retirement villages in WA for $188 million in August last year. The villages contributed a profit of $28 million and revenue of $31.1 million.

"Our core Retirement Living business achieved EBITDA of $111.7 million which included revaluation uplifts of $61.5 million," BBC chief executive John Martin said.

"The positive revaluations were largely driven by strong underlying performance growth and uplift in underlying economic exposure through upward revision of resident contract terms."

"This highlights the strength and quality of the underlying assets despite a difficult residential property environment."

The retirement business also generated $33.1 million in cash, driven by 425 re-sales over the year, representing a 6.3 per cent annualised turnover.

The company will pay an interim distribution of 2.1 cents per share.

Additionally, BBC will buy the management rights from struggling fund manager Babcock & Brown Ltd.

The move will make it easier for BBC to field takeover offers, B&B said.

"The agreement is designed to facilitate the price discovery process that BBC announced today as part of the strategic review process being carried out by the board of directors of BBC," it said.

Today's move follows B&B's announcement last week of board and management changes as well as a business restructure in response to a significant drop in interim profit.

BBC is managed by B&B's corporate and structured finance division which is being gradually wound down.

"Today's agreement with BBC is in line with Babcock & Brown's commitment to narrow the focus of its activities," new B&B chief executive Michael Larkin said.

BBC has agreed to pay B&B $17.5 million as consideration for internalising the management agreements.

The acquisition price will be paid in cash or scrip at the option of BBC.

Potential bidders for BBC can acquire B&B's rights under the existing management agreements for cash at the same price.

As well, B&B will dispose of its holding of 64.8 million BBC securities - 10 per cent of the securities on issue - to the acquirer of the management rights through a pre-bid acceptance agreement.

Shareholders will vote on the move to internalise the management of BBC at their annual general meeting in November.