Port Bouvard announces big interim dividend

Property developer Port Bouvard Ltd has announced an interim fully-franked dividend of 40 cents a share, up 300 per cent on the payout for the company's shareholders this time last year.

The dividend compares to a 10 cent per share fully-franked payout for the previous corresponding period.

The sharply increased dividend for the half-year ended December 31, 2005, follows a recent surge in land sales at the company's Port Bouvard estate and Princeton private estate, in the Perth inner northern suburb of Stirling.

In October, the Port Bouvard estate recorded its best month ever with 115 home sites sold, representing $40.97 million in sales revenue a six-fold increase on the previous month.

Last month the final stage of Princeton comprising 74 lots was put on the market two years ahead of schedule. On the first weekend, 28 blocks at Princeton were sold and since then all 74 lots have sold. This compares to usual average sales at the Stirling estate of six blocks sold per month.

"The recent sales numbers have been far greater than we had expected," Mr Michael Perrott, chairman of Port Bouvard, said.

"The really positive news for shareholders is that we are also seeing prices for blocks and profit margins improving significantly. This premium is the result of continuing healthy market demand, plus buyers jumping in to secure blocks before the estates are sold out. All sales of land at Port Bouvard and Princeton could now be completed by the end of 2006 but this will depend on general market conditions over the next year, the state of the economy and other non related factors."

Mr Perrott also reported to shareholders on the status and progress of the settlement of the sale of The Cut golf course, world-class Marina and other associated assets at Port Bouvard to John Kelly and his associated company, Vive Holdings. The sales of these assets, announced in two tranches in June, are scheduled to see further payments made to Port Bouvard by December 1.

He said that after further pre-settlement talks with Mr Kelly, the directors could confirm that they had no information which would suggest that the scheduled payments of $18.4 million to Port Bouvard would not occur as scheduled next week. The company has previously received non-refundable deposits of $1.5 million from Mr Kelly and Vive Holdings.

Mr Perrott said that if the payments are received from Vive Holdings the directors would declare an additional special payment of 20 cents a share to shareholders, which is likely to be partly-franked and paid out approximately 60 days after the funds were received. He said the company had engaged a specialist tax adviser to determine a recommended form of payout.

It was likely to take a few weeks to develop a recommendation for the board to consider options which could include making the payment by special dividend or as a return of capital.

Port Bouvard is one of only a few ASX-listed companies which declares and pays out half-yearly and annual dividends to shareholders ahead of balance date. The interim dividend will be paid to shareholders on December 1, with a record date of
December 7.

Mr Perrott said the increased market interest and anticipated better property sales prices being achieved meant the board had recently been able to forecast an improved final payout to shareholders by way of dividends and returns of capital at the conclusion of the selling of the Port Bouvard and Princeton estates which could now potentially occur by the end of calendar 2006.

The developer is now forecasting an increased final return to shareholders of between $1.95 and $2.15 per share (including the December 2005 interim dividend of 40 cents a share fully franked) compared to the previous forecast of between $1.47 and $1.67 per share. Mr Perrott said the final payout to shareholders is likely to be partly franked.

The increased payout also allows for the retention of approximately 10 cents a share. Mr Perrott said it is now not the intention of the Directors for the company to be wound up once current sales are completed. He said the directors consider there to be significant inherent value in the ASX-listed company structure, together with its sound management and systems, plus the goodwill generated by the successful development, marketing and sale of the Port Bouvard and Princeton estates.