Australia's Stockland sees no firm signs of property recovery; shares drop
* Annual profit slumps nearly 70%
* Shares hit nearly seven-week low
* Co flags flat growth in fiscal 2020
(Recasts, adds comments from CEO & analyst, share movement)
By Aby Jose Koilparambil and Shreya Mariam Job
Aug 21 (Reuters) - Stockland Corp's annual net
profit plunged nearly 70% and the Australian residential
developer also warned that there were no firm signs of recovery
in the cooling housing market as yet, sending its shares down 5%
The downbeat forecast comes at a time when it appeared that
the country's housing market started rebounding in June, after
dropping every month since late 2017.
Signs of higher demand in June from Sydney and Melbourne had
stoked hopes that Australia's once-booming housing market might
survive the steep property downturn; but a spurt in late
mortgage payments and cautious forecast by developers implied a
"Despite an improvement in residential enquiry and the
market bottoming, we expect the market to take some time to
normalise as customers continue to experience challenges
achieving loan approvals," Chief Executive Officer Mark Steinert
said in a statement.
Tepid wage growth and weak consumer sentiment are likely to
retain uncertainty in the property market, the statement said.
Shares in Stockland dropped as much as 5.2% to a near
seven-week low of A$4.360.
"The management still does not see a perceptible change in
the sentiment with regard to recovery in property, and the
market has not embraced the rhetoric Stockland has put on the
table," James McGlew, executive director of corporate
stockbroking at Argonaut.
Stockland's cautious view contrasts with a more positive
outlook offered by real estate classifieds platform Domain
Holdings Australia and construction firm Lendlease
Group earlier this month.
Stockland said it expects flat growth in funds from
operations per security, a measure of profitability, in fiscal
Statutory profit for the year ended June tumbled to A$311
million ($210.70 million) from a profit of A$1.03 billion a year
earlier, dented by devaluations in certain portfolios.
Retail town centre, which accounts for most of the
commercial property revenue, suffered a devaluation, which
totalled A$474 million for the year, due to harsh market
The company declared a distribution per security of 27.6
cents, and said it expects distribution payouts at the
bottom-end of the 75%-85% target ratio.
($1 = 1.4760 Australian dollars)
(Reporting by Shreya Mariam Job and Aby Jose Koilparambil in
Bengaluru; Editing by Bernard Orr and Sherry Jacob-Phillips)
First Published: 2019-08-21 01:39:07
Updated 2019-08-21 06:27:11
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