Finbar posts $18.2m first-half profit

Property developer Finbar Group says it is confident of meeting its full-year profit forecast of more than $21 million after it today delivered an interim net profit after tax of $18.2 million.

The interim result compares to the $4 million net profit result delivered for the previous corresponding period.

Finbar said the record first half result was largely attributable to a high level of project completions and settlement conversions during the six months to the end of December 2009.

The net profit result was on the back of a revenue surge from $8 million the previous year to $141 million.

The board has declared a two cent fully franked interim dividend.

"The return of invested capital and profit resulting from these successful completions, coupled with the strong financial position of our regular joint venture partners, is well timed to provide a robust platform for growth opportunities in a period where there are increased levels of mortgagee and receiver controlled sales," Finbar said.

"Construction finance credit tightening and relatively modest growth in new apartment values have created barriers to entry and have largely restricted competitive activity in our sector."

Finbar added that it used this opportunity to offer two new products to the market - the Times Two and Fairlanes projects on Adelaide Terrace in Perth.

The projects have secured a combined $146 million in sale, which Finbar said effectively underwrites both projects. Construction at the developments has started.

Finbar added that it was well positioned for selective acquisitions of new development land during what it called was a time of extensive opportunity.

"High barriers to entry for competition, reduced competitive rivalry from existing developers, and our industry leading costs base, are delivering an improvement in margins for all projects, and enable the company to offer a product to meet the market," the company said.

"Finbar has a dependable brand that has a track record of delivery in challenging environments. This competitive advantage is assisting us in the negotiation of new project acquisitions for the next cycle of growth."

Shares in Finbar climbed 4.5c to $1.03 at 15:55 AEDT.