Finbar profit down as market softens

Apartments developer Finbar Group says softer conditions in the Western Australian property sector have resulted in moderate pre-sales results at its new projects, after lodging a $6.3 million net profit for the first half of the 2016 financial year.

The result was a 42 per cent drop compared with the previous corresponding six months, where Finbar lodged a $10.9 million net profit.

Finbar said it took a $4.4 million hit because of a revaluation of the commercial component of its Fairlanes project in East Perth, but it did not anticipate any further write-downs in the second half of the financial year.  

For apartments, Finbar said it had been able to achieve good results in competitive market conditions, averaging sales of eight apartments per week across its portfolio of projects.

Finbar’s pre-sales book totals $465 million of its $2.12 billion development pipeline, while it also reported strong sales results on completed apartments.

Managing director Darren Pateman said the developer was pleased to have achieved a solid profit considering current market sentiment.

“The reduction in book value for our Fairlanes office building from $49 million to $42.75 million is disappointing but realistic considering the very soft conditions being experienced in the Perth office leasing market,” he said.

“At this stage, we are not providing any profit guidance for FY16 as again this will be ultimately determined by the number of apartments that are sold and settled for both Linq and Unison by June 30 2015.

“However, as a result of Unison and Linq completing during the second half, we still expect to report a respectable full-year profit in the current subdued market.”

Finbar will pay an interim dividend of 3 cents per share, down from 4 cents per share in the previous corresponding period.