Multiplex has posted a net profit after tax of $216.8 million for the year ending June 30, 2006 – thanks to positive property revaluations and revenue earned from the sale of Multiplex Property Trust’s assets. By Nelson Yap
Multiplex scrapes through
Multiplex’s underlying net profit -excluding property valuations, asset sales and other items was $50.5 million – inline with the group’s FY2006 profit guidance of $50 million.
Meanwhile, Multiplex’s revenue fell by 4% to $3.17 billion. However, Multiplex’s other income which includes revaluation gains from investment properties and sales increased to $619 million.
Multiplex’s total operations costs were $3.12 billion; total finance costs were $157 million and expenses were $515.8 million.
Multiplex’s property development division contributed earnings before interest and tax of $100.0 million to the overall Group result, on external revenue of $417.2 million – a fall when compared to $587.1 million in 2005.
The division’s result for the year included profits of $37.2 million from the divestment of various UK assets. However, these profits were offset by $35.3 million inventory valuation write-downs and project cost write-offs.
At June 2006, the gross development value of the UK development pipeline remained relatively unchanged from June 2005 at $9.3 billion, whilst the value of the Australian portfolio had increased from $5.1 billion to $6.6 billion.
The construction division contributed a loss EBITA of $319.8 million, and external revenue was $2,468.0 million compared $2,479.1 million in 2005. The division was affected by the Wembley project in the United Kingdom, which incurred a loss for the year of $364.3 million before tax and $255.0 million after tax.
At June 2006, the division’s portfolio included 36 projects with a total contract value in excess of $8 billion. In the UK, Wembley is now substantially complete and the group is focusing on pursuing recoveries from third parties.
Multiplex’s facilities management division contributed earnings before interest and tax of $7.4 million to the overall group result.
The property funds management division contributed EBITA of $53.8 million to the overall Group result.
Meanwhile, Multiplex has grown its funds under management to $5.8 billion from $5.5 billion in 2005, after allowing for the sale of the $0.7 billion Sapphire Retail Fund.
The group also launched a new $640 million Australian Office Fund, to be listed in September this year.
The Multiplex Property Trust, contributed EBITA $446.5 million compared $126 million in 2005.
During the year the trust achieved a tenant retention rate of 95% by area, with 119 new and renewed leases completed in respect of more than 25,000 sqm.
Looking ahead, Multiplex’s chief executive office Andrew Roberts said the prospects for FY2007 are sound.
“The property development division has a solid development pipeline in terms of its gross development value, while the construction division has a replenished workbook and good forward workload.
“In the case of property development, the development pipeline is biased towards project completions in FY2008 and beyond. Accordingly, project completions in FY2007 are likely to be fewer than average and this is expected to impact on earnings in the short-term,” he added.
Robert said the funds management and facilities management divisions are expected to build on growth achieved over the last year although their FY2007 earnings are not expected to include any significant one-off profits outside normal operations.
“The trust is expected to continue to benefit in FY2007 from the strength of its property investment portfolio, in particular its high occupancy and its recent tenant retention and rent reviews.
“The directors are not in a position to provide any outlook in respect of likely FVAs in FY2007,” he concluded.
Multiplex has declared a final distribution of 17.5 cents.
Multiplex shares closed 11 cents higher at $3.55.
Meanwhile, Westfield has taken over from Multiplex the full responsibility for the remaining design and construction works for the $2 billion White City project.
Roberts said the transfer of the construction contract for White City will accelerate the group’s repositioning of its UK construction workbook.
“Our focus in the UK is predominantly on internally generated work from our own development projects – through our integrated property model.
“We remain firmly committed to maintaining a sizable UK business. In recent times we have been rationalising the number of assets acquired as part of the Duelguide transaction. Our focus has been on retaining a select number of key development projects such as the A$720 million Eden shopping centre redevelopment in High Wycombe, and the large development scheme in Newcastle City Centre,” he added.
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