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Stockland Reports Positive Operating Results for 3Q16

Stockland Reports Positive Operating Results for 3Q16
The company’s residential segment secured over 1700 net deposits, coupled with 279 additional sales from new projects and new townhouse sales, compared to pcp.
Apr 28, 2016 By Kaivalya Kandarpa Tags: SGP

Stockland Corporation Limited (ASX:SGP) announced upbeat operating results for the third quarter ended 31 March 2016, as the company remains on track to achieve underlying EPS growth of 6.5% - 7.5% and anticipates a 9-10% rise in Funds from Operations (FFO) per security in FY16.

During the third quarter, Stockland recorded 2.5% growth in comparable speciality retail sales and comparable speciality moving annual turnover (MAT) rose 3.5%. While total comparable annual sales across all retail categories grew 2.3%, communication technology, retail services food catering and fast casual dining were the strongest segments.

Stockland aims to generate a 7-8% yield and an Internal Rate of Return (IRR) of 11-14% from the $1.6 billion development pipeline in the Retail segment (Retail occupies 51% of the SGP portfolio).

The company’s residential segment secured over 1700 net deposits, coupled with 279 additional sales from new projects and new townhouse sales, compared to pcp.

Stockland’s Managing Director and CEO, Mr. Mark Steinert was pleased with the company’s performance: “We’ve maintained high sales volumes across our Residential business, and our Retirement Living business has continued deliver consistent growth. We have seen a slight moderation in retail sales growth from high levels and we’ve maintained good leasing momentum and high occupancy across our Retail, Logistics and Business Parks and Office portfolios.”

Mr. Steinert further added that around 90% of the Residential segment’s capital has now been employed in projects with ongoing sales.

Acquisitions and Developments during 3Q16

Stockland acquired the remaining 50% interest in the Bundaberg shopping centre in Queensland and commenced its market campaign to sell the Port Adelaide Distribution Centre. The company also began the $372 million redevelopment of Stockland Green Hills in New South Wales. The acquisition of the 116-hectare property at Coomera on the Gold Coast for residential development purposes has been completed. The Retirement Living development pipeline has proceeded well with important stages on schedule for completion and settlement in the two upcoming quarters at Cardinal Freeman and Willowdale, New South Wales, and Lightsview, South Australia.

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Kaivalya Kandarpa Author: Kaivalya Kandarpa Apr 28, 2016

Kaivalya is an equity analyst and a client advisor at Wise-owl. She specialises in fundamental and technical analysis for large and mid-cap companies. Having completed her bachelor's degree in Business Administration majoring in Finance, Kaivalya has a comprehensive understanding of international stock market movements. She tracks local and overseas markets and compiles analytical reports for various industries.

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