GPT Group has lifted reported first half profit by 67 per cent and says it is on track to be Australia’s best performing property group.
Chief executive Michael Cameron said GPT expected to deliver a strong result for the 2011 full calendar year, forecasting operating income per security to grow about seven per cent.
The company on Friday booked a net profit of $243.1 million for the six months to June 30, up 67 per cent from $145.2 million a year earlier.
Profit from operations grew eight per cent to $221.5 million and operating income per security rose eight per cent to 11.3 cents.
GPT said the difference between its operating income and reported profit reflected the effect of non-cash items, largely net increases in the valuation of assets and movements in derivatives.
“We have the platforms in place to deliver continued growth, and we are on track to be Australia’s best performing property group,” chief executive Michael Cameron said.
Mr Cameron said, in a market briefing, that despite the current cautious retail trading environment, GPT’s portfolio of retail assets – mainly regional shopping centres – had performed well.
He said consumer confidence was at the lowest level since May 2009, households were saving more rather than spending and global economic uncertainty continued.
Online retailing continued to threaten retailers who could not adapt.
“I think GPT is well placed to respond to all of these challenges. Over a quarter of our retail sales are from food and supermarkets and that provides a very strong, stable base,” Mr Cameron said.
Mr Cameron said that in the first half, customer traffic and the average spend per customer had shown minor growth.
But retail sales had been incredibly variable month by month and, although first half numbers were encouraging, GPT remained cautious about the second half.
“But with virtually no vacancies, we’re well positioned in the face of a slower environment,” Mr Cameron said.
Mr Cameron said larger regional malls were continuing to do well, but things were tougher for main street shops and sub-regional centres.
“We’re making sure that we continue to attract people to the centres, and we keep the traffic up and they stay vibrant.”
Mr Cameron said the collapse of retail chains Red Group and Colorado had resulted in 20 stores closing across GPT’s portfolio, although 13 stores so far had been re-leased.
Mr Cameron said GPT’s office portfolio was also in good shape and the outlook was strong due to constrained supply, especially in premium-grade properties.
The industrial portfolio was solid as limited supply underpinned rental growth.
“Our intention now is to more aggressively grow the industrial portfolio where opportunities arise,” Mr Cameron said.
GPT securities were one cent lower at $2.99 on Friday.
