Property developer Peet’s stocks have dropped after it released an earnings downgrade for the 2012 financial year, blaming falling consumer sentiment and global and domestic economic uncertainty.
At close of trade today Peet shares had plunged 13.4 per cent, to trade at $1.00.
Peet said its operations would be negatively impacted by the financial turmoil in Australia and overseas, and now expected an after-tax profit of between $15 million and $20 million for the year ending June 30, 2012.
The developer lodged a $44 million after tax profit for financial year 2011.
Peet said it had decided to defer capital expenditure on some of its major projects until conditions returned to normal, which would defer settlement revenue to future periods.
Peet said its dividend policy would remain unchanged at 60 per cent of operating earnings, but expected it to be paid as a final dividend at the conclusion of FY12.
“Peet’s board and management are focused on strong capital management and positioning the company to take advantage of improvements in the residential market, anticipated to emerge during the second half of FY12 or early FY13,” Peet managing director Brendan Gore said in a statement to the ASX.
“A number of key company-owned projects including Craigieburn and Greenvale in Victoria and Gladstone in Queensland and a number of other projects will underpin the performance of Peet in the years ahead.
“However we have temporarily cut back the development spend on certain projects, until suitable levels of pre-sales are secured.
“This has the effect of delaying settlement revenue to future periods.”
Peet said sales continued to tick over at its projects in WA, Victoria and Queensland, but were below expectations.
The developer recorded a total of 327 net contracted sales for the four months to October 31, down from 668 in the previous corresponding perioud.
Contracts on hand as of October 31 totalled 1,090 for $279 million, compared to 1,125 contracts for $289 million as of June 30.
“Consumer interest in our residential projects continues to be solid with consistent sales traffic and registrations of interest though there has been a slower rate of conversion into sales,” Mr Gore said.
