31/08/2011 - 10:56

Results reflect tough year for listed players

31/08/2011 - 10:56

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Results reflect tough year for listed players

PERTH’S listed property players are upbeat in their outlook for 2012 even if investor sentiment and an anaemic residential market continue to weigh on their performance.

The annual profit reporting season produced a diverse spread of results from the state’s major listed property groups, ranging from Cedar Woods Properties’ record $28 million result to Port Bouvard, which managed a net profit of just $800,000 for the financial year.

Despite the wide range of profit results, the weakness of WA’s residential property market provided a common narrative thread for these companies in both their analysis of the past year and their forward outlooks.

It also clearly illustrated the protective value of diversification, with Cedar Woods, Peet and to a lesser extent Finbar all benefiting from projects outside of the Perth market.

Cedar Woods managing director Paul Sadleir said the group’s record result was underpinned by improved profitability across its projects, particularly in Melbourne where the residential market had offset the soft conditions in WA.

“This result confirms the strength and diversity of our property portfolio and importantly the success of our business strategy to offer residential housing across a range of price points in WA and Melbourne,” Mr Sadleir told WA Business News.

“The Melbourne market has been stronger than the Perth market and we have got projects in places that are performing well.”

Cedar Woods revealed it had $130 million worth of presales for projects scheduled for completion in WA and Victoria this financial year and was on track to deliver a full-year net profit of about $34 million for 2011-12.

Despite its investment in major new projects in the fast-growing regions of WA, Queensland and Victoria, Peet reported a 47 per cent fall in its statutory net profit to $22.1 million on the back of write-downs on its Queensland portfolio.

Peet’s operating net profit improved by 3 per cent to $44 million, driven by its Victorian projects, and managing director Brendan Gore flagged a focus on the affordable housing segment to drive growth of what is Australia’s biggest pure play residential developer.

However, its recent investment in the 25-year Flagstone project in south-east Queensland, and its partnership with the Future Fund to acquire and develop broad-acre residential land couldn’t offset the negative shift in consumer sentiment.

Peet said weakening consumer confidence hit sales and settlements hard, with sales falling 14 per cent in the year and settlements 7 per cent. 

Soft sales conditions also provide strong buying opportunities and Peet appears to have taken advantage of consumer uncertainty to bolster its land holdings or land bank to more than 50,600 lots with an estimated on-completion value of $9.1 billion.

Peet plans to maximise the value of this landbank and utilise it to meet pent-up demand for affordable housing in Australia.

“Housing affordability is a critical challenge right across Australia and will remain so in the short to medium term due to the structural supply demand imbalance,’’ Mr Gore said.

“Peet will help address this challenge and meet market demand for affordability with its large and flexible land bank by expanding its product mix and offering a range of lot sizes in a variety of locations across the country.”

Aspen Group managing director Gavin Hawkins admitted he was happy to be closing the book on what was a tumultuous year for the group, which would be best remembered for the attempted board spill in March.

Despite that drama, the group posted a 39 per cent jump in profit to $17.4 million, which Mr Hawkins said reflected Aspen’s focus on improving the quality of its property portfolio.

Mr Hawkins revealed the group had completed its refinancing of its debt facilities and improved its capital structure, reducing its gearing from 37 per cent to 28 per cent.

Looking forward, Aspen said its property portfolio was well positioned to take advantage of the improving market conditions in the WA office sector.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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