Australian house building company Stockland Group (ASX:SGP) posted strong third-quarter results in its announcement to the ASX on Monday. Its full-year guidance for earnings per share (EPS) was raised between 7 and 7.5 per cent, up from the previous range of 6.75 to 7.5 per cent. Comparable specialty sales grew 4.9 per cent in the quarter with the best performing categories being communication technology, homewares, food catering and retail services. The company has also advanced its $1.2bn retail development pipeline during the quarter. The first stage of major redevelopments of Wetherill Park in Sydney and Baldivis in Perth opened during the quarter. The two developments have a combined $340 investment value and are expected to achieve initial stabilised yields of 7 to 8 per cent and incremental IRRs of 13 to 14 per cent.
Stockland acquired about 4000 new lots during the quarter, including both residential and apartment sites. The sites are in metropolitan growth corridors and are well supported by infrastructure and other industries. The $160m Cardinal Freeman redevelopment in Ashfield, Sydney has advanced significantly. It is expected to be completed in April 2016 and 65 per cent of the already completed lots have been reserved. The report said the company would continue to focus on growing its Logistics and Business Parks portfolio. Managing Director and CEO Mark Steinert said he was pleased with the results and will focus the company on future growth and acquisitions. “We continue to be disciplined in implementing our strategy to grow our returns and this has seen us achieve another positive quarter across all areas of our business,” he said.
Shares of SGP are up 5c, or 1.12 per cent, at $4.50 per share around 3:36pm on Monday. SGP has advanced 15.98 per cent in the last 12 months and 9.22 per cent so far this year.
Author: Simon Herrmann
May 04, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.