Stockland's half-year earnings rise on strong home price growth
Stockland Property Group said its interim net profit edged up 0.7 percent to $702 million for the half-year ended December 31 over the same period the previous year, underpinned by strong home price growth, mainly in the eastern seaboard.
Revenue climbed 9.8 percent to $1.169 billion.
Funds from operations attributable to security holders rose 7.8 percent to $369 million and the developer said it was tightening its outlook to the higher end of its previous forecast of 5 percent -7 percent.
Stockland said it was paying an unfranked interim distribution of 12.6c, payable on February 28 to shareholders of record on December 30.
“We’re pleased to deliver another strong first half result, which has been driven by our ability to create thriving, vibrant communities. We’re implementing our strategy to reshape our portfolio, growing our asset returns and customer base, improve operational efficiency and maintain a strong balance sheet, which has enabled us to increase our distribution to investors,” managing director and CEO, Mark Steinert, said in a press release.
Although its residential operating profit margin fell to 14.1 percent, the developer’s residential business managed 2,853 settlements during the period and entered 2017 with a record 5,807 contracts on hand.
It said the outlook for the full-year operating profit margin for residential was 15-16 percent as it expected strong price growth on the eastern seaboard. The developer said this was due to its focus to create “liveable, desirable communities,” growing market share and continued favourable market conditions.
Its commercial property business grew 3.7 percent in comparable FFO, while the retirement living component increased its operating profit by 43.8 percent to $26 million, which reflected a 1H17 skew, largely due to improved margins and occupancy and the timing of superlot and asset sales.
Stockland also maintained its strong balance sheet and A-/Stable credit rating with gearing at 23.9 percent, which was well within its target range of 20 - 30 percent, said chief financial officer Tiernan O’Rourke.
Steinert was upbeat on economic conditions continuing to be favourable and expected interest rates to remain relatively low.