Development group Peet says long-term conditions in the Australian property are fundamentally sound, but has warned falling consumer confidence could stymie a sustained improvement in housing demand in the short-term.
Peet today reported a net profit of $200,000 for the year to June 30, down from a $5.4 million net profit in FY2012.
The company’s $15.2 million operating profit was in line with guidance provided in April.
The net profit result was weighed down by $13.3 million in writedowns, which came on landholdings in Queensland, non-core assets in Victoria which have been made available for sale and a small development site on the Sunshine Coast.
Revenue was up to $205 million, from $147 million in FY2012
Peet said it would defer dividend payments until market conditions improve.
Managing Director Brendan Gore said the last two to three years were some of the most challenging he had encountered in the residential property market.
“Despite this, we have confirmed our strategy in the context of our capital management program and at the same time we have invested in our future by securing a controlling interest in CIC and successfully completing the Peet Greenvale syndicate,” Mr Gore said in a statement.
He said the company was well positioned for future growth as market conditions improve.
Mr Gore said the company would focus on debt reduction and efficiencies in FY2014, as well as strategic spending on development and infrastructure.
“While continued rate cust by the Reserve Bank to record low levels have been welcome encouragement for homebuyers, they also reflect the prevailing low levels of consumer and business confidence, and concerns about employment levels and Australia’s economic performance,” he said.
“Nonetheless, there have been some encouraging signs of improvement in the Western Australian property market during the year and moderate improvement in the Victorian market.
“Peet expects these markets to continue to improve over the year ahead, along with southeast Queensland, which is coming off a very low base.”
At close of trade today, Peet shares had dipped 0.7 per cent, trading at $1.28.
