Australand upgrade full year earnings by up to 20%

Potential takeover target Australand Property Group has upgraded its full year earnings by up to 20%, thanks to positive conditions in the residential property market.

The upgrade, which also included a 19% lift in its distribution guidance to 25.5c, comes less than a week after rival property group Stockland swooped on a 19.9% strategic stake in the company - a move widely considered to be a prelude to a full takeover. 

Australand now expects its operating earnings per security for 2014 to be 17-20% higher than the previous year.

In a market update, the company said that "as part of its usual quarterly review process, the Group has revisited its earnings expectations, having particular regard to positive market conditions in the residential sector."

Specifically, it said the group’s residential division continued to experience strong demand and price growth across a number of projects and as a result it now expects that the 2014 residential earnings contribution will be higher than previously expected.

Australand managing director Bob Johnston said: “We are very pleased with the continued momentum in our Residential division.”  

“Year to date sales activity has been encouraging, particularly in NSW.” 

Management also announced that it had commenced the process of closing out its existing interest rate derivatives book and was re-hedging its interest rate exposure at prevailing market rates.