The market has been tested in the last six months and it's a pleasure to be able to report that Stockland has performed well. Our approach has proven sound, delivering solid profits for the half year. Our ability to deliver profit growth in these volatile times is an endorsement of our strategy of continued focus on property fundamentals.
Financial highlights
For the half year ended 31 December 2007, our operating profit* was $324.6 million, an increase of 10.7 per cent over the prior corresponding period. Our earnings per security* grew by 4.2 per cent to 22.4 cents, while our dividend and distribution rose by 5.1 per cent to 22.6 cents per security. Our balance sheet is strong, supported by $462.4 million of investment property revaluations, an increase of 10.8 per cent on previous book value. Our gearing ratio is 28.5 per cent with an average weighted debt maturity of 6.2 years.
*Before certain significant items
All our Australian operating businesses contributed to Stockland's strong results. Our office, industrial and retail businesses achieved impressive rental income and property revaluation gains across the portfolio. Our residential business delivered a solid result underpinned by the diversity of both product and geography.
Our move into the Retirement Living space with the acquisition of Australian Retirement Communities (ARC) has proven successful. ARC has been integrated into our Retirement Living business and is performing ahead of expectations.
Property and capital market conditions in the UK are tough, and even though our short term performance is affected by this, the impact on our overall performance is not material given our relatively small investment in this market.
We continue to focus on property fundamentals. This means constantly placing strategy first by leveraging and extending our existing businesses, exploring capital partnering opportunities, and only pursuing new business opportunities that are a logical fit. With our property skills, solid balance sheet, high performing people, and culture of learning and skills development, we are well placed to perform in the current market conditions.
Diversity equals strengthDiversity, by asset class and geography, will continue to underpin our consistent performance through these changing market cycles. Our integrated platform ensures synergies, economies of scale and knowledge transfer across our global portfolio.
Outlook
The property industry is facing challenging times ahead with ongoing market volatility and the prospect of future interest rate rises. We expect to continue to perform well in this environment by sticking to our strategy of focusing on business fundamentals while maintaining a considered approach to capital management.
We are in a solid position to capitalise on the opportunities we expect will arise as a result of future market conditions. Our balance sheet strength and strategic focus stand us in good stead to deliver long-term future growth.
Graham Bradley
