Strong results for diversified Peet Limited
23/08/2007- Net profit after tax increased by 23.6% to $45.5 million
- Earnings per share increased by 16.3% to 21.4 cents per share
- Final dividend of 10.5 cents per share fully franked (Full year: 19.5 cents per share)
- Gearing ratio of 28% (net bank debt / total tangible assets – adjusted for market value)
- Total of some 8,200 lots acquired during the year (total land bank now 33,800)
- Land syndicate capital raisings totalling $57 million during the year
Fund and asset manager, Peet Limited, has announced details of another strong year's performance with an after-tax profit from operations of $45.5 million for 2006/07 – an increase of 23.6% over the previous year.
It is the Company's fourth consecutive report of NPAT growth since listing in 2004 and reflects the success of its operationally and geographically diversified business model, which has produced continuous profits over many years.
"More than half Peet's earnings before tax for the year have been delivered by our operations in Victoria and Queensland," said Chairman Tony Lennon. "And the Company has positioned itself well to take advantage of improved market conditions in those states in the year ahead.
"Our Western Australian operations also performed well during the year. While we saw a plateauing of sales prices in WA in the latter half of the year, a satisfactory market for land sales continues," he said.
Peet Limited today also announced an increase in earnings per share of 16.3% to 21.4 cents per share for the year, and a final dividend for the year of 10.5 cents per share fully franked. That brings the total dividend per share for the year to 19.5 cents – or 27.9 cents per share before tax allowing for 100% franking - an increase of 14.7% over the previous year.
Managing Director, Brendan Gore said the net growth in the Company's land bank during the year was another significant achievement and augured well for the future.
"The strength of our land bank has always been fundamental to our success and during the year we acquired some 8,200 lots across the country. The net increase of around 6,200 lots during the year positions us well to take advantage of market conditions around the country in the years ahead, particularly in Victoria and Queensland," he said.
"We have continued our program of acquiring well-located land parcels in Western Australia, Victoria and Queensland bringing the total number of lots managed and owned at year-end to almost 34,000, with a further 4,200 lots potential under conditional contract as at 30 June 2007.
"In less than two years, Peet's land bank has grown in estimated end value from $3.79 billion to its 30 June '07 level of some 33,800 lots with an estimated end value of $6.13 billion (if sold at today's prices)."
Much of that growth has been in Victoria where Peet established an office a decade ago and is now a major participant in the selling of residential lots. Peet is also set for major expansion in Queensland where estates in Caboolture, Beachmere, Gladstone, Mitchelton and Cooroy are in the planning phase. The Company's search for opportunities in New South Wales, where the market has underperformed compared to other major Australian states, is also paying off with an acquisition currently under due diligence.
Mr Gore said Peet was currently exploring additional opportunities for its expanding Peet Senior Living division following the commencement of successful pre-sales in its $70 million development, named Lattitude, at Lakelands in Western Australia and the purchase of another site within its Warner Lakes estate in Queensland during the year.
"Peet Senior Living will continue to expand nationally in the year ahead," he said. "Other opportunities, including one in Victoria, are currently being pursued and explored."
Peet has again proved itself a market leader in land syndication, raising $57 million from three syndications of land holdings in Victoria, Western Australia and Queensland during the year. These syndicates were particularly successful in increasing syndicate investor participation, adding significantly to the Company's existing group of investors.
Peet's revenue from land syndication during the year increased by 7.8% over the previous period to $42.6 million.
At the other end of the supply chain, Peet posted residential sales of more than 2,000 lots across Australia for a total gross value of more than $421 million. At the end of the period, Peet and its managed entities had in excess of 1,100 lots that had sold but were yet to settle for a value of $240 million.
Another highlight for the year was the successful $82 million capital raising, via an underwritten institutional placement completed in November 2006, coupled with a Share Purchase Plan for existing investors which raised another $1.95m, enabling the Company to accelerate growth across the business divisions.
At year's end, the Company's Income Property Fund had expanded to more than 600 members and more than $50 million in funds under management. The Fund acquired two strategically located industrial and commercial properties in Perth and Darwin during the year and made its first purchase in Victoria, due to settle later this month.
Other operational highlights for the year included:
- Managing and obtaining development approval for a $20 million shopping centre at Carramar in Perth's northern suburbs; and
- Peet Living's first two apartment-style developments – Grand 56 and Sixteen Hammersmith in Joondalup (WA) selling off the plan with more planned for WA, Victoria and Queensland in the year ahead.
