Stockland boasts profit rise, tightens guidance
Stockland reported statutory profit of $696 million, up 50.6 per cent on 1H15 in its first half of 2016 update. Funds from operations (FFO) of $342 million were up 11.3 per cent while underlying profit of $313 million culminated in an increase of 8.1 per cent. The group has ‘tightened’ its FY16 guidance for earnings per security (EPS) growth to 6.5-7.5 per cent above FY15.
“This strong result demonstrates that our focus on the disciplined implementation of our strategy is working,” said Stockland MD and CEO, Mark Steinert. “We have maintained our balance sheet and continued to improve our operational effectiveness.”
The retail operations arm of the group recorded $197 in funds from operations, representing an increase of 3.3 per cent on 1H15. Retail net operating income was $183 million, up 3.5 per cent. Stockland says the result was supported by high stable retail occupancy levels of 99.5 per cent.
We continued to achieve stronger sales growth across our portfolio,” said commercial property CEO, John Shroder. “We also saw a resurgence in department stores and discount department stores with sales growing 1.9 per cent for the half and the pace picking up with 2.1 per cent growth in the December quarter.”
Schroder says the redeveloped Stockland Wetherill Park in Western Sydney, recorded over 721,000 unique customer visits in December. This represents a 42 per cent increase on the corresponding trade period of the previous year.
“Our next major project is now underway with the $372 million redevelopment and expansion of Stockland Green Hills in the Lower Hunter Valley, due for completion in 2018,” said Schroder. Stockalnd Green Hills is the best performing centre of its size in Australia for specialty moving annual total (MAT).
“We will create a leading lifestyle and leisure precinct, and have already executed agreements for lease with David Jones, Target, JB Hi-Fi Home and Dan Murphy’s,” said Schroder.
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