National property development group Stockland remains buoyant about its prospects over the next two years, even taking into account an expected slowdown of activity in Western Australia primarily on the back of weakening resources sector investment.
Stockland today posted a net profit of $462 million for the six months to December 31, a 55 per cent lift on the previous corresponding half-year.
Revenue was $1.33 billion, up from $966.5 million in the previous half year.
Chief executive Mark Steinert said the company’s residential development arm was the standout performing across its divisions, achieving a 72.8 per cent lift on the first half of FY2014.
Mr Steinert said the residential business as on track to achieve FY2015 settlements at the upper end of its guidance range of 5,000 to 6,000 lots.
Settlements in WA were up 16 per cent on the previous result, primarily driven by the launch of a new estate at Calleya in Perth’s south eastern growth corridor.
Other key residential projects in WA that Stockland expects future growth in include Whiteman Edge, Newhaven, Brookdale West, Amberton and Vale.
However, the developer said it expected a moderation of sales and flat land prices in WA in 2015 due to weakening commodity prices.
But with just 9 per cent of its total business in WA, Stockland said it expected to continue to grow its earnings, particularly those from the eastern seaboard, in the next two years.
“While consumer confidence and employment growth are likely to remain constrained, we expect population growth and interest rates to remain generally supportive of residential markets for some time,” Mr Steinert said.
“We are confident that Stockland is well-positioned to produce sustainable returns for security-holders across our portfolio.”
Profit growth in Stockland’s commercial portfolio was 4.7 per cent, while its logistics and business parks division grew its profit by 21.9 per cent over the period.
Stockland’s retirement living arm achieved an operating profit of $16 million, up 5.8 per cent on the previous half year.