FKP Property Group has lifted its half year profit by 40%, bolstered by the commercial and industrial division which posted a 87% jump in earnings.
In the six months period to December 2009, FKP delivered an operating profit of $49.2 million up 40% when compared to $35.2 million in the previous corresponding period.
The group’s statutory profit was $48.8 million compared with a loss of $158.4 million in the corresponding period in the prior year. CEO Peter Brown said the cycle of write-downs in the valuation of investment properties and development assets has slowed, with only minor adjustments to values required in the December half.
He stated that the result shows the group is back on track and more importantly the outlook in the short to medium term is positive.
FKP commercial and industrial division was the star performer with earnings rising 87% from $3.4 million in December 2008 to $27.3 million as a result of the pre sale of its Energex building to Cromwell. There were also gains in the residential communities, to the tune of $5.5 million compared to a loss of $1.1 million in pcp.
However, the retirement business earnings fell 11% from $63.4 million to $56.1 million and funds management earnings decreased from $10.7 million to $5.4 million.
Debt gearing is at 28%, based on net bank debt drawn of $743 million. At the same time last year, gearing was 41%, and net bank debt was $1.22 billion.
NTA has increased to $1.27 per security.
Brown said the Group is no longer seeking asset sales to fund its future commitments, and FKP will only consider the disposal if the price is right.
He estimates of earnings for FY10 will be approximately $100 million.
FKP expects a stronger second half and full year Operating NPAT may be 5% to 10% ahead of existing consensus.
For the half, the distribution has been limited to earnings from the FKP Property Trust, which was 0.5 cents.
But Brown said the policy will be reviewed before the full year distribution is determined.
Australian Property Journal
