Troubled property developer Port Bouvard has blamed cancelling the acquisition of land at Gidgegannup for a $26 million net loss after tax for the 2010 financial year.
Troubled property developer Port Bouvard has blamed cancelling the acquisition of land at Gidgegannup for a $26 million net loss after tax for the 2010 financial year.
The figure was a slight improvement from last year's loss of $29 million.
In 2010 the company recorded land sales of $20.2 million but its total asset impairment was $19 million before tax.
It will not be paying shareholders a dividend.
Despite the loss the board believes that Port Bouvard experienced a "transformation" in 2010 which has given the Company a fresh start to create sustained shareholder value.
"The Company has during the reporting period made a number of difficult but necessary decisions to ensure our long term success," said chairman Lee Verios.
"As a result the Company is well positioned to realise the potential of our flagship asset and at the same time ensure we maximize opportunities to generate sustained value creation for all shareholders."
See company statement below:
Port Bouvard Limited delivers result in line with expectations as foundation built for a fresh start
Western Australian focussed residential property developer Port Bouvard Limited (ASX:
PBD) ("Company") is on track to enter a period of renewed growth from 2010/11 onwards, despite reporting a net loss after tax for the year ended 30 June 2010 of (A$25.7M). A before tax operating loss from continuing operations of ($4.7m) was recorded over that same period.
The reported loss is primarily due to the accounting impairments and losses associated with the disposal of the Gidgegannup project (see ASX announcement 20 May 2010). In addition, the reported loss resulted from the limited number of lots available for sale by the Company, with total revenue from the sale of land recorded for the period being A$20.2M.
The total asset impairment recognised by the Company for the year was A$19.2M before tax as anticipated.
The Board believes that the Company experienced a "transformation" which has given the Company a fresh start to create sustained shareholder value.
This "transformation" was achieved by various activities during the period which included:
- Refinancing of A$167.6M facility with long-term lender St George Bank;
- Cancellation of agreements to acquire further land at Gidgegannup;
- The introduction of a major listed Australian property company FKP Property Group
(ASX: FKP) as a strategic long-term investor;
- A fully underwritten A$60.2M capital raising;
- The successful execution of non-core asset disposal strategy, resulting in sale of the
Melros site for A$4M; and
- Settlement of the majority of the final stage of the Company's Eastport 5 subdivision.
Port Bouvard Limited Chairman, Mr Lee Verios, said:
"The Company has during the reporting period made a number of difficult but necessary decisions to ensure our long term success. As a result the Company is well positioned to realise the potential of our flagship asset and at the same time ensure we maximize opportunities to generate sustained value creation for all shareholders."
By cancelling agreements to acquire further land at Gidgegannup the Company has removed the future commitment of between A$45-54M. In mid July 2010 the Company finalised its A$60.2M capital raising, enabling the Company to meet its permanent debt reduction to St George Bank, provide sufficient short-term working capital and $32.2m of funds for the development of the initial infrastructure and stage one of its flagship asset, Point Grey, near Mandurah south of Perth.
"As a result of the audited asset impairment, the capital raising and the Gidgegannup cancellation agreement, consolidated net tangible assets per share is $0.23", Mr Verios said.
During July 2010 the Company completed work on the landmark Oceanique Luxury
Apartment development, which the Company believes is one of the most exclusive and
iconic residential apartment developments along the Western Australian coast, with the first phase of settlements of pre-sold apartments occurring soon after.
"We are pleased that the settlement of pre-sold contracts at Oceanique have progressed as
anticipated and look forward to updating the market more specifically regarding the first
phase of settlements in the coming weeks", Mr Verios said.
Outlook
Port Bouvard Limited is well positioned to make considerable advances during the coming years.
"The Company now has a solid foundation, committed relationships with its primary lender and cornerstone investor, a strong balance sheet, and a highly experienced executive and management team," Mr Verios added.
"With this foundation in place the Company is focussed on achieving delivery of the Point Grey development, the Company's flagship asset."
The planning and environment approvals required to commence development at Point Grey continue to be achieved with the objective of first settlements being completed by the end of 2011.
The Company has recently appointed FKP Property Group nominees Mr Peter Brown and Mr Geoff Grady to the Board.
The Company is also expecting to generate significant revenue over the coming 12-18
months from the sale of its remaining apartments at the Oceanique Luxury Apartment
development, and from further disposal of non-core assets. The settlement proceeds of
Oceanique apartments and non-core assets are being used to reduce debt with lender St
George Bank.
