Stockland residential sees operating profit soar 83 percent
Stockland's residential sector has seen its operating profit rise to $182 million, up 82.8 percent, in the first half of 2018.
Their operating profit margin was up to 21 percent, compared with the 14 percent for the first half of 2017.
Stockland managing director and CEO Mark Steinert said the company has built a strong residential business over the last four years.
"We have made considerable progress reshaping the business, placing a greater focus on the deep Melbourne and Sydney markets with particular emphasis on transport and infrastructure corridors," Steinert said.
"As a result, our Residential business delivered another half of exceptionally strong returns and settlements, with operating profit growing over 80 per cent to $182 million in 1H18.
“We settled a record 3,210 lots, up 12.5 per cent on the corresponding period, and achieved a net operating profit margin of 20.9 per cent. FY18 profit will be skewed to the first half of the financial year due to a large proportion of higher-margin Sydney settlements.”
Stockland expects operating profit margins of around 17 per cent in FY18 and for the next two to three years, subject to market conditions.
“We have intentionally increased our weighting to Sydney and Melbourne housing, where the markets continue to be driven by structural undersupply. Around half our residential customers are first home buyers and over 75 per cent are owner-occupiers, which places us in a preferred position in the current residential lending and policy environment.
“More than 95 per cent of our residential business earnings over FY18 - FY20 will be generated by our masterplanned communities, and we continue to progress our disciplined re-entry into the apartment market,” Steinert concluded.