GEO PROPERTY ACHIEVES $150M TURNAROUND

GEO PROPERTY ACHIEVES $150M TURNAROUND

LISTED Gold Coast property developer GEO Property Group (ASX: GPM) has completed a $149.8 million turnaround in net earnings to record a net profit of $18.2m for FY10.

It compares to a net loss of $131.6m in the previous year and has been built on near record settlements of 863, up from 711 in the 2009. The settlements lifted total revenue by 21 per cent from $212.9m to $272.2m.

Managing director Guy Farrands, says a highlight of the group’s full year result was net operating cash flows of $77 million while net tangible assets were $148.8 million, representing 34.9 cps.

He says the result underlined the strength of the business and reconfirmed the value of the Group’s decision to focus exclusively on residential property development.

“We have remained focused on bringing quality product to the market and meeting the expectations of consumers looking for affordable homes in great areas,” said Farrands in a statement.

“Our ability to deliver a record number of settlements with vastly reduced expenses further underlies the efficiency of the business and the potential for future earnings growth.”

Farrands says the group’s reduced levels of debt which has created greater financial stability provided the flexibility to undertake a re-stocking of the Group’s development portfolio, including the acquisition of approximately 520 new lots over the last 12 months.

“The sale of four non-core investment property assets, with a further three properties to be sold shortly, will complete the orderly unwinding of our investment arm and leaves the Group as a pure developer of residential house and land and land-only projects,” he said.

“At the end of the year we had a total pipeline of nearly 4495 lots spread across a diverse range of geographic locations.”

During FY10 the group achieved total settlements of 863 (2009: 711), including proportional share of JV sales, at an average gross margin of 20.9 per cent.

Farrands attributed sales to a stronger underlying demand throughout the year, but concedes challenges ahead for Queensland’s sluggish property sector.

“Our Victorian operations continue to benefit from strong conditions which are driving high volumes and better margins. In Queensland there are still a number of challenges,” he said.

“Interest rate concerns have somewhat subsided in recent months but there is still uncertainty among buyers about the political outlook as well as the impact of offshore financial and economic events.”

Despite the current market conditions the group was already well placed for a strong start to the current year with a total value of unconditional contracts as at August 20 2010, to be carried into FY11 of $71 million.

GPM shares are today trading at 21c.

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Looking for a credit or charge card that’s built for your business? Try American Express
Partner Content
A good credit card should work for you, not against you, and let you and your business ...
American Express
Advertisement

Related Stories

Devine abandons Alba to upsize at Burleigh Heads with $400m Burly tower

Devine abandons Alba to upsize at Burleigh Heads with $400m Burly tower

In a sign that the heat has yet to come out of the Gold Coast prope...

Mandatory COVID isolation to end nationally mid-October

Mandatory COVID isolation to end nationally mid-October

National Cabinet has today determined that mandatory isolation peri...

Sunset on the horizon in 2023 for developer Sunland

Sunset on the horizon in 2023 for developer Sunland

A developer behind some of the Gold Coast's most iconic buildin...

Unique ‘floating homes’ planned for $40m Dockside Port Vincent tourism hub

Unique ‘floating homes’ planned for $40m Dockside Port Vincent tourism hub

The sleepy rural hamlet of Port Vincent in South Australia is set t...