Perron boasts $90m profit

Western Australian tycoon Stan Perron’s private investment empire has capitalised on the surging property and equities markets to record a bumper 2004-05 financial year net profit of almost $90 million, up 50 per cent for the period.

In Australian Securities and Investments Commission records obtained by WA Business News, Mr Perron’s flagship investment company, Perron Investments Pty Ltd, appears to have sold down property investments to reduce debt by $160 million.

At the same time, asset revaluations and increasing equity holdings appeared to have helped boost net assets to $745 million – a jump of almost $150 million.

While Perron Investments managing director Ian Armstrong was not available to discuss the results today, earlier in the week he told WA Business News the group was planning to focus on organic growth in the current period rather than looking to buy or sell further.

The group owns several shopping centres but also has office investments, including its $150 million half share in Perth CBD property Central Park.

“Retail is very hard to purchase,” Mr Armstrong said.

“The market is hot. It is a wonderful time to sell, if for some reason you wanted to sell. If you sell the dilemma is what to do with the funds.”

Instead, the group planned to improve its current portfolio of buildings, of which shopping centres are a central feature.

“We have quite a substantial development program, either started or pending,” Mr Armstrong said.

The group results contained in the annual report of Perron Investments reveal the company, which is the key operating entity for Mr Perron, made a net profit of $89.4 million on revenue of $430.1 million for the year ending June 30.

That compared with a net profit of $59.8 million on revenue of $20.9 million in the previous corresponding period, according to records lodged with ASIC.

Net assets were up almost 30 per cent to $745.3 million from $579.5 million in 2003-04, mostly as a consequence of a drop in total non-current liabilities by $161.4 million, or almost 21 per cent, for the financial year to $620.8 million from $782.1 million the previous year.

The notes to the accounts show that the proceeds on the sale of investment properties was $155.6 million while the proceeds from the sale of equity investments was $48.6 million for the year, boosting revenue by $204.2 million.

Apart from those investment sales, revenue from operating activities was $225.9 million, up almost 9 per cent from $207.6 million the previous year.

Rental income from Perron Invest-ments’ property empire, which includes a half share in Central Park, remained largely steady at $93.5 million.

While the carrying amount of freehold land and buildings fell to $882.1 million from $957.1 million over the course of the year, there was a considerable gain in other financial assets for the period.

Additions to the property portfolio were limited to just $17 million for the year. Holdings of listed shares and units jumped to $51.8 million from $23.4 million while units in unlisted unit trusts jumped to $206 million from $145.6 million.

On a minor note, the company’s investment in 1,560 hectares of blue gum plantations rose to $6.6 million from $4.8 million, the result of a market valuation undertaken by URS Forestry.