AU Stockland plans cutbacks, warns on profit outlook
Property Here - Tuesday, May 14, 2013
PROPERTY developer Stockland has warned its full-year profit will plunge 25 per cent as it pays out for an increasingly ambitious restructure.
And the group has unveiled plans to cut back its portfolio of office properties while warning it will take a hit on the value of some residential projects.
The company announced yesterday that its profit for the year to June would be affected by impairments costing it up to $49 million.
It expects profit to clock in at the lower end of its forecasts in February, when it said earnings per share was likely to be 20 per cent to 25 per cent lower this year.
The group nonetheless expects to maintain a pay out of 24c per security this year and next.
Stockland shares climbed in the wake of the revelation, closing 1.8 per cent higher at $3.89.
Stockland chief Mark Steinert said the company would look to cut costs by 10 per cent in the coming year, having already stripped 10 per cent from its expense bill over the past year.
Mr Steinert said the cuts would be driven by centralising Stockland's human resources, finance and marketing operations, and improving efficiency across the group.
He said the Stockland would be adjusting its portfolio by increasing its exposure to industrial property and reducing its office interests.
The group would maintain its exposure to shopping centres, residential real estate and retirement homes, he said.
"Our business remains in transition and we have a clear strategy to achieve stronger future returns,'' Mr Steinert said.
It contrasts with a move by rival property group Mirvac to up its stakes in the office markets.
Mirvac last week announced it was splashing $584 million on a portfolio of seven inner-city office properties, including 90 Collins St in Melbourne.
Shares in Mirvac also climbed yesterday, closing 1.4 per cent higher at $1.77.
Read more: http://www.news.com.au/realestate/news/stockland-plans-cutbacks-warns-on-profit-outlook/story-fncq3gat-1226641756496#ixzz2TGbUp1XM