Peet H1 profit surges 50%

An active first homeowners market and improving market conditions has drive property developer Peet's first half operating profit up 50 per cent.

The Perth-based company today booked an operating net profit after tax of $21.7 million, which excludes the write-down in carrying value of inventories in the first-half of the 2009 financial year.

Revenue jumped 38 per cent to $98.4 million and the directors have declared an interim dividend of four cents for each share.

During the six months to the end of December 2009, more than 1,400 lots were sold, up 57 per cent on the previous corresponding period.

At the end of the December 2009, a total of 1.172 lots were under contract, 25 per cent more than the same time the previous year, for a gross value of $234.7 million.

At the end of the reporting period, Peet had interest bearing debt, net of cash, of $184 million with gearing reduced to 33 per cent.

Peet chief executive Brendan Gore said the first-half performance provided the company with a stable platform for growth.

"While the Federal Government's First Home Owners Boost (FHOB) concluded at 31 December 2009, significant government incentives remain and sales trends in the first weeks of 2H10 show first home buyers are still active in the market," he said.

"Peet has a strong supply of affordable lots in geographically diverse locations to meet the needs of this market and we expect solid levels of demand to continue.

"While the number of first home buyers is normalising since the phasing out of the FHOB, upgraders and investors are also returning to more traditional levels of activity in the market."

Mr Gore added that Queensland had been the slowest of Peet's major markets to show signs of recovery, however the company expects improved results in the year ahead.

"Though overall market conditions appear to be improving, Peet remains cautious about the potential effects of further interest rate rises as well as supply side constraints on affordability and consumer confidence," he said.

"Peet will continue to assess growth opportunities, and its responsible approach to capital and operational management means it is in a good position to take up opportunities where it's prudent to do so.

"Continued stability in the Victorian market, a significantly improving Western Australian market, the number of lots under contract and sales in the second half to date all contribute to Peet's positive outlook as it moves into the second half of the year."

Shares in Peet climbed four cents to $2.11 at 13:17 AEDT.