Peet posts FY record profit of $48m

22/08/2008 - 11:36


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Perth-based property and land developer Peet Ltd has overcome challenging conditions in the housing market to post another full-year record profit.

Peet posts FY record profit of $48m

Perth-based property and land developer Peet Ltd has overcome challenging conditions in the housing market to post another full-year record profit.

In its preliminary report, the company recorded an increase of over five per cent in net profit after tax of $48 million, representing and earnings per share of 21.6 cents.

Earnings before interest and tax was up from the previous year's $67 million to $72.3 million, with 69 per cent of that coming from the east coast thanks to strong residential land sales in Victoria and Queensland.

Western Australia contributed 31 per cent of EBIT in what the company said was a "satisfactory performance in a challenging" market.

"This is the fourth consecutive year in which more than half the company's EBIT has come from east coast business," chief executive Brendan Gore said.

The robust earnings from the east coast follows the collapse of its Innisfail Estate in Victoria in may which put at risk the settlement of 134 lots.

Since then, Peet said it was able to achieve settlement on 45 lots within fiscal 2008, while settlement of the remaining lots are not expected to occur in the first half of FY09.

Overall, Peet sold a total of 2274 lots from its managed and owned projects, grossing over $370 million in sales, while settlements were achieved on more than 2400 lots which grossed more than $426 million in sales revenue.

At the end of the period the group had over 940 lots that were sold but were not settled, valued at almost $183 million.

Over the year, Peet acquired 5600 lots, taking its land bank at the end of the year to about 37,000 lots with an estimated value of $7.4 billion, if sold at today's prices.

"Peet Limited expects to be operating within a challenging Australian residential market in the year ahead, with clear signs that the difficult macroeconomic environment will persist in FY09," Mr Gore said.

"Nonetheless, the fundamentals of the residential property market remain sound.

"While short-term issues such as affordability, purchaser confidence and investor activity can cause more volatile short-term cycles, long-term prospects for residential property development are strongly linked to underlying supply and demand.

"The current cycle has resulted in a major shortfall in housing supply relative to underlying demand, which is determined by factors such as population growth (driven by international migration) and employment rates - and those factors remain positive.

"Interest rates are also a key catalyst for consumer sentiment and, while anticipated lower interest rates are unlikely to spark an immediate response, it should have a positive impact on the residential property market."

The directors declared a fully franked final dividend for the year of 10.75 cents per share, taking the total dividend for the year to 19.75c.


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