Countries: Australia
The Westfield Group (ASX:WDC) today announced its full year results, reporting Operational segment earnings for the year ended 31 December 2006 of $1.65 billion, up 8.5% over the prior year (on a constant currency basis). This represents an increase of 6.0% on a fully diluted basis.
Net profit for the year was $5.58 billion, which includes property revaluations and mark to market adjustments. The distribution for the year was $1.87 billion representing 106.5 cents per security.
Assets were revalued during the year resulting in a $5.1 billion increase, which includes $950 million of development gains recognised in 2006 from developments completed during the year. The value increase across the balance of the portfolio was driven by increased income and yield compression.
Westfield Group Managing Directors, Peter Lowy and Steven Lowy, said “This result highlights the strength of Westfield’s business model. The two key contributing factors to the overall result for the year were a solid operational performance across the global portfolio and the successful delivery of 12 development projects. We continue to operate in a solid retail environment in all markets with strong demand for retail space in both our existing centres and development projects.”
In 2006 the Group completed $2.0 billion of development projects (Westfield Group investment - $1.6 billion) in the United States, Australia and New Zealand. These projects delivered significant investment returns, achieving a weighted average income yield of 9.6%, and development gain on completion of $1.1 billion.
Major development projects completed in 2006 include San Francisco Centre, Century City and Topanga in Los Angeles, Chermside in Brisbane and Liverpool and Parramatta in Sydney.
At year end there were 15 projects underway at a forecast investment of $6.6 billion, with the Group’s share being $4.6 billion. This included $1.5 billion of developments commenced during 2006.
Highlights for the year include:
Outlook
The Group has interests in 121 shopping centres across Australia, the United States, the United Kingdom and New Zealand with a gross value of approximately $60.7 billion and encompassing 22,750 retail outlets. The size and quality of the portfolio with its geographic diversity, combined with the Group’s intensive management, continues to provide the foundation for sustainable income and capital growth.
“Focus will remain on the Group’s development program, with the scheduled commencement of $1.5 - 2.0 billion of new development projects in 2007 of which approximately $1 billion has already commenced, and the efficient recycling and use of capital to fund this investment”, Mr Lowy said.
The distribution for the 2006 year included a capital component for the first half of $128 million. In accordance with the Group’s Distribution Policy, the Group ceased to distribute these project profits from 1 July 2006.
For 2007, the Group is targeting a distribution of 106.5 cents per security which will be met by an increase in operational segment earnings.
ENDS
The Westfield Group (ASX Code: WDC) is an internally managed, vertically integrated, shopping centre group undertaking ownership, development, design, construction, funds/asset management, property management, leasing and marketing activities and employing in excess of 4,000 staff worldwide. It has investment interests in 121 shopping centres in four countries, with a total value in excess of A$60 billion and is the largest retail property group in the world by equity market capitalisation.
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Westfield Group