Key highlights include:
- Interim dividend of 9 cents per share fully franked to be paid 18 April 2008 – maintaining the interim dividend paid at the same time last year;
- 61% of EBIT delivered from operations across Victoria and Queensland;
- 1,370 lots from owned and managed projects were under contract, at 31 December 2007 – an increase of 23% since 30 June 2007. These unsettled sales have a value of $281 million, underpinning confidence in the second half of FY08’s performance;
- Establishment of the $300 million Peet Wholesale Land Syndicate and its purchase of a residentially zoned beachfront property at Alkimos, a northern suburb of Perth, with potential for a masterplanned community of some 2,800 lots;
- Gearing ratio at 41% (net bank debt/total assets – adjusted for market value); and
- Land bank increased to around 38,000 lots with an estimated on-completion value of $7.6 billion (if sold at today’s prices).
Managing Director and Chief Executive Officer, Brendan Gore, said the result for the half-year was in line with expectations and that the performance of the Company’s Victorian and Queensland operations was particularly pleasing.
“Our eastern states operations have performed well, delivering 61% of EBIT and reflecting the strong property markets and improved volume and lot prices in those states and we expect that trend to continue in the second half of the year,” said Mr Gore.
As well as strong demand resulting in volume growth from east coast developments, the Company’s results show an increase in the average sale price of lots in Queensland and Victorian estates of 21% and 10% respectively, compared with the same period last year.
“Meanwhile, the Western Australian market has eased and while the Company expects further easing in the Western Australian market in the months ahead, the medium and long-term fundamentals including population and economic growth remain strong,” Mr Gore said.
Peet’s land bank pipeline management and acquisition strategy has positioned it to effectively manage the changes in the Western Australian market.
The Company is currently managing in excess of 70 projects across Australia, well over half of which are on the east coast. In the next 18 months, sales at a further 17 developments (with a total of 6,026 lots) in Victoria, Queensland and Western Australia are scheduled to commence with 12 of these estates in the growth markets of Victoria and Queensland.
“We have been very strategic in allocating capital and making key acquisitions during the first half of the year,” said Mr Gore.
More than 5,400 potential lots have been purchased, including five parcels of land in Queensland and another in New South Wales. Some 2,800 lots relate to the Alkimos syndication.
“The establishment of the Peet Wholesale Land Syndicate and its acquisition that secured a land parcel with the potential to yield 2,800 rare coastal lots at Alkimos, a northern suburb of Perth, was achieved with the backing of major institutions including MTAA Super and The Myer Family Company Pty Ltd,” said Mr Gore. “We look forward to delivering sound returns on that investment in the years to come.
“Preparations for the launch of a Peet Alkimos retail syndicate in the first quarter of FY09 are underway and it has already received strong national interest from potential investors,” he added.
The Company also acquired a parcel of potential industrial land in Victoria – Peet’s third in the region, expanding the Company’s capacity in this area. The second half of the 2007/08 financial year is expected to deliver the balance of the targeted growth for Peet Limited with a large number of lots already under contract and due to settle during the period.
The Company achieved sales of some 1,025 lots in the first half of 2007/08 and as at the end of the period there were 1,370 lots (an increase of 23% since 30 June 2007), with an estimated on completion value of $281 million, sold and awaiting settlement.
“Peet Limited continues to operate under the same quality business model that has delivered consistent growth over many years with a high level of transparency and reasonably low gearing,” said Mr Gore.
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