FKP Property Group (ASX:FKP) has taken a $187.9 million impairment on its property assets and will be rebranded to Aveo Group, the company announced today.
The rebranding comes as FKP focusses on its retirement assets, with the large write down attributable to non-retirement property and done "in the context of the group’s strategy for rationalisation”.
It will also dispose of a holding in PBD Developments Limited (ASX:PBD).
The impairment will be excluded from the determination of the group’s underlying result for the year ended June 30, which is expected to be in the range of $38m to $40m.
CEO Geoff Grady (pictured) says the the write-downs are a necessary step in executing the company’s strategy.
“With the gradual recovery of the retirement sector, we are confident about the outlook for our business and re well progressed on delivering our strategy of becoming Australia’s
leading pure play retirement group,” Grady says in a statement to the ASX.
The $187.9m in write-downs come primarily from FKP’s residential and commercial inventory.
There is $107.4m total write down to the residential land development inventory relating principally to Saltwater Coast in Melbourne ($63.7m), The Rochedale Estates in Brisbane ($28.2m) and an amount of $15.5m for Ridges at Peregian Springs and Peregian Springs on the Sunshine Coast, Currumbin on the Gold Coast and Shearwater on Phillip Island in Victoria.
Albion Mill apartments in Brisbane suffered an impairment of $3.6m, while FKP’s commercial development inventory took a $48.7m hit.
The FKP is the major shareholder of Aveo Healthcare (ASX:AEH), which last month changed its name from Forest Place Group.
FKP is trading 4.33 per cent down this afternoon at $1.435 per unit.
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