Thakral has realised a $94 million increase in the value of its property portfolio, which is set to boost the group’s expected profit after tax by 145%.
Yesterday, Thakral said $94 million revaluation gain represents a Net Tangible Asset Backing increase of 15 cents from 80.5 cents to 96 cents.
Thakral said the change to IFRS accounting standards from AGAAP has resulted in a significant favourable impact on the group’s profit and loss account.
“While the operating results for the year are still to be finalised Thakral advises that expectations are for an increase in profit after tax and before revaluation to approximately $36 million or 25%,” the company said in a statement.
According to Thakral, under IFRS the increase arising from the revaluation effect of the group’s commercial and retail properties is now credited to profit.
As result, $52.9 million of the total revaluation increase of $94 million is added to the group net profit of approximately $36 million resulting in total group profit of approximately $89 million – an increase of 145% over the previous year.
“The combined effect of the significant valuation increases flowing through the profit and loss account for the first time coupled with the change in the manner in which profit from the development activities are reported will inevitably lead to greater volatility in Thakral’s annual results.
“For example, it would be unreasonable to expect this level of valuation increase each year. Further, as previously stated development profits are now reported on a settlement basis resulting in “lumpy” profit recognition,” the company said.
Thakral’s managing director John Hudson said hotels are moving out of the shadows of traditional investments like offices, industrial and retail properties.
“Hotels are now on radar and two years ago they weren’t,” he added.
Thakral is expected to announce its final results on Friday, August 18, 2006.
By Nelson Yap
