Perth-based financial services group Home Building Society has confirmed a full year profit guidance of at least $10 million for the 2006 financial year, a 60 per cent increase on 2005.
Perth-based financial services group Home Building Society has confirmed a full year profit guidance of at least $10 million for the 2006 financial year, a 60 per cent increase on 2005.
The AIFRS adjusted result reflects strong trading conditions for Home's banking and land investment divisions.
Home's operating performance provides a good platform for the proposed merger with StateWest Credit Society, scheduled for completion in early July.
Home has also declared a final fully franked dividend of 24c, which will be paid in early July, prior to completion of the StateWest merger.
The final dividend will lift the full year, fully franked distribution to 43 cents - up 34 per cent on last year.
Home chairman Tony Howarth said the decision to make the early dividend payment was designed to reward shareholders for the performance of the company prior to the merger taking effect.
Home Managing Director Craig Coleman said Home had enjoyed strong trading conditions in which it continued to outpace the market in both lending and deposit growth.
Full year lending growth is forecast at 33 per cent, and deposit growth is forecast to rise 27 per cent.
As announced on April 21, StateWest members recently voted again overwhelmingly in favour of demutualisation, the first of a twostep process through which they will consider the Home merger proposal.
Court approval will now be sought on May 4 2006 for the formal merger vote to take place, with documentation due to go to StateWest members later this month.
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1 May 2006
Home confirms full year profit guidance, early dividend payment
Home Building Society (ASX: HME) today confirmed its full year net profit guidance for the 2006 financial year of at least $10 million.
The $10 million net profit forecast represents a 60% increase on FY05 (adjusted for AIFRS) and reflects strong trading conditions for both Home's banking and land investment divisions.
Home's operating performance provides a good platform for the proposed merger with StateWest Credit Society, scheduled for completion in early July.
The Board of Home has declared a final fully franked dividend of 24c which will be paid in early July, prior to completion of the StateWest merger. The final dividend will lift the full year, fully franked distribution to 43 cents (up 34% on last year).
Home Chairman Tony Howarth said the decision to make the early dividend payment was designed to reward shareholders for the performance of their company prior to the merger taking effect.
The dividend record and payment date will be declared by the Home Board in late June.
Home Managing Director Craig Coleman said Home had enjoyed strong trading conditions in which it continued to outpace the market in both lending and deposit growth.
Full year lending growth is forecast at 33% after a strong 29% rise in FY05. Deposit growth is forecast to rise 27% after 19% in FY05.
"We are also pleased that this growth has not been achieved at the expense of credit quality or control over costs," he said.
"In addition, we have experienced continued performance from Home's long-term property land bank.
"With the commencement of land sales at our 25% owned Provence development in East Busselton, we now have four active and profit yielding land developments projects.
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"The Provence project is located in Western Australia's South-West, one of the fastest growing regions in Australia. The project comprises approximately 2,000 blocks and has an estimated life of 10 years.
"Home's 25% stake has a book value of $3 million, though its market value is estimated by project manager Satterley Group at $10-11 million. More than 200 land sales have been contracted since sales commenced in March 2006."
Mr Coleman said East Busselton would make a material contribution of at least $3 million pre-tax to Home's financial performance in FY07, the first year of the proposed merged entity.
As announced on 21 April, StateWest Members recently voted again overwhelmingly in favour of demutualisation, the first of a 2 step process through which they will consider the Home merger proposal.
Court approval will now be sought on 4 May 2006 for the formal merger vote to take place, with documentation due to go to StateWest Members later this month.
Home Managing Director Craig Coleman said the two organisations were targeting early integration following completion of the merger formalities.
"A lot of work has gone into preparations for the merger and ensuring we capture the synergies as quickly as possible," said Mr Coleman.
"We feel very comfortable with the $8-10 million range set out in the Independent Expert's report provided to StateWest Members."
Mr Coleman said there was also a strict focus on maintaining the culture and service ethics of Home and StateWest, which he said were the standout features of the two organisations in the WA market.
"We will hit the ground running, with more than 110,000 customers and total customer funds under management of $4 billion," he said.
"Our ambition is to provide West Australians with a genuine alternative to big banks but preserve the culture and identity that has been the bedrock of our success with customers to date."