RUN Corp has reported a net loss of $17.5 million for the year ending June 30, 2006.
Yesterday, RUN Corp chief executive Nathan Cher released the company’s preliminary unaudited results, of which $9.3 million is a non cash provision for asset impairment.
Cher said that the asset impairment adjustment was a non cash item reflecting write off of acquisition and other up front costs associated with rent roll acquisitions, together with a $3 million adjustment to the carrying value of rent rolls.
According to Cher, the result is consistent with results forecast in April this year of an EBITDA loss of $6.85 million and an NPAT loss (pre-amortisation) of $6.5 million.
“As indicated at that time, those forecasts did not include the cost of implementing the revised business model which was adopted following the review of operations earlier this year or the outcome of the review of asset carrying values. The one off restructuring cost totalled approximately $1.1 million,” he added.
Cher said that following the implementation of the revised business model earlier this year, the company was now stable and a monthly breakeven operating cash flow position is projected for the last quarter of the financial year ending June 2007.
"Specifically, we have lowered our base operating costs considerably by introducing more efficient processes, thereby reducing staff numbers by 15%.
"We are also making good progress with our decentralisation program. New office locations include Carlton, Clifton Hill and East Malvern in Victoria and Lindfield, Hurstville, Edgecliff and Bondi Beach in New South Wales and we are expanding and refurbishing a number of other offices in both states,” he added.
RUN is the largest Australian residential rental property manager with approximately 22,000 properties under management in Melbourne, Sydney and Brisbane.
By Kathryn O’Meara
