Sunland Group boost profits for FY2015

Improving consumer confidence and market conditions in Melbourne, Sydney and south-east Queensland have helped residential developer Sunland Group boost profits for the 2015 financial year. 

The group reported an after-tax profit of $30.1 million, 111% up on its 2014 result. 

It said higher development margins and an increase in settlement values were partly responsible for the profit uplift, but most of the increase came from the sale of $90.1 million worth of assets in Sydney and Melbourne. 

Some of the sale proceeds were earmarked for reinvestment in south-east Queensland, including the acquisition of a 42 hectare site on the Gold Coast and the group’s first residential housing development site in Brisbane.

“Sunland has maintained a counter-cyclical approach to site acquisition and divestments, positioning the group’s development portfolio to capitalise on the improving south-east Queensland residential markets,” managing director Sahba Abedian said.

The group also used the proceeds to pay out a special 6 cent per share dividend, bringing dividends for the year to 10 cents, fully-franked. 

Sunland, which has developments along Australia’s eastern seaboard, reported sales were up 20% on the previous year to 754 lots, however settlements were down by 13% to 389.

“Whilst settlement volumes decreased as a result of [the] strategic asset sales, settlement values still increased by 7% across the balance of the portfolio,” Abedian said.

Multi-storey apartment buildings account for $2.3 billion worth of the group’s $3.7 billion portfolio, with residential housing and urban developments making up the balance. 

It has 10 projects scheduled to launch in 2016 and aims to increasingly focus on multi-storey developments over the medium-term. 

The group intends to issue profit guidance at its annual general meeting on November 20.