Countries: Australia
Westfield Holdings Limited today announced an after-tax profit of $47.1 million for the six months to 31 December 1997, up 15.0% on the same period last year.
Earnings per share also increased by 15.0% - 9.60 cents compared with 8.35 cents per share for the December 1996 half-year.
An interim dividend of 4.80 cents will be paid, which compares with 4.18 cents last year. The interim dividend reflects a 50% pay-out ratio and continues to be 60% franked.
All facets of the Group's business contributed to strong growth, with EBIT (earnings before interest and tax) increasing 27.2% from $56.6 million in December 1996 to $72.0 million this year. Profit before tax rose 13.6% to $61.0 million following a higher interest charge as a result of investment activities in the US.
The value of shopping centre assets under management now stands at $12.8 billion.
The result, which maintains Westfield's record of continuous profit increases over its 38-year history as a public company, reflects the solid cash flows from the Group's shopping centre operations, its ongoing development program in Australia and the continued expansion of its US business.
Westfield's Managing Director, Corporate & International, Mr David Lowy, said "The geographic diversity of our business, the demand both by retailers for space and by consumers to shop in the centres, as well as the quality of the shopping centres themselves, provide a sustainable basis for continuing earnings growth."
Mr Lowy said that he was confident that the strong profit growth achieved in the first half would be continued in the second half of the year.
In Australia, planning continues for a $2 billion redevelopment program involving 15 projects in all, to be implemented over the next five years.
Seven of these projects, with a total value of more than $650 million, are scheduled to commence in 1998: Carousel in Perth; Stage II of Chatswood in Sydney; Strathpine, Indooroopilly and Chermside in Brisbane; and Southland and Airport West in Melbourne.
New developments are currently being planned in the United States for centres owned by Westfield America, Inc, a US Real Estate Investment Trust managed by Westfield Holdings and listed on the New York Stock Exchange.
Four projects with a total value of more than US$250 million are expected to commence within the next 12 to 18 months: West County Center in St Louis, Missouri; Annapolis in Maryland/Washington DC; Meriden Square in Connecticut; and South Shore Mall in Bay Shore, New York. Redevelopment projects for a number of other centres are expected to commence within the next five years.
The US retail property market continues to reflect a major shift from the direct ownership of shopping centres by institutional investors and private individuals, towards securitised real estate through the publicly-listed REIT market.
This change provides a unique opportunity for the growth of Westfield America, which has made property acquisitions totalling US$456 million since June 1997.
In April 1997, Westfield Holdings was appointed the property and development manager for the portfolio of ten shopping centres owned by the St Lukes Group in New Zealand. During the period under review, Westfield's management operations were put in place and planning commenced for the redevelopment of several of the shopping centres over the medium term.
Work is continuing on the Suria KLCC shopping centre in Malaysia, with the first stage scheduled to open for trading in May 1998. Westfield provides project management and leasing resources for the development and will have an on-going management role for the centre upon completion. Westfield Holdings has a 10% equity interest in the centre, costing approximately Aust. $25 million, which is covered by a currency hedge.
| Financial Highlights |
 |
Dec 97 |
Dec 96 |
% Change |
| REVENUE |
307,979 |
310,398 |
- 1% |
| DEPRECIATION |
3,971 |
5,053 |
- 21% |
| EBIT |
71,955 |
56,576 |
+ 27% |
| NET INTEREST EXPENSE |
(11,006) |
(2,913) |
+ 278% |
| PRE TAX PROFIT |
60,949 |
53,663 |
+ 14% |
| TAX EXPENSE |
(13,864) |
(12,732) |
+ 9% |
| NET PROFIT AFTER TAX |
47,085 |
40,931 |
+ 15% |
| EARNINGS PER SHARE |
9.60 |
8.35 |
+ 15% |
| INTERIM DIVIDEND - Per Share (60% Franked) |
4.80 |
4.18 |
+ 15% |
OTHER KEY STATISTICS: |
Dec 97 |
Dec 96 |
|
| SHOPPING CENTRE ASSETS UNDER MANAGEMENT (A$billion) |
|
|
|
| GROSS LETTABLE AREA (million square metres) |
4.4 |
3.8 |
|
| NUMBER OF SHOPPING CENTRES MANAGED |
68 |
56 |
|
| NUMBER OF RETAIL OUTLETS IN CENTRES |
9,900 |
8,600 |
|
| ANNUAL SHOPPING CENTRES RETAIL TURNOVER |
|
|
|
| AUSTRALASIA (A$billion) |
A$7.8 |
A$6.2 |
|
| UNITED STATES (US$billion) |
US$5.4 |
US$4.8 |
|
Westfield Group