Property giant Goodman Group has returned to profitability and forecast earnings to rise 20 per cent this year on the back of its Asian and European businesses.
The company has expanded its operations in China and now has two million square metres of land either under, or on its way to being under, its control.
Goodman is an industrial property owner, developer, manager and fund manager – the largest company of its kind listed on the Australian stock market.
Its European operations were the standout performer for the past 12 months after previously being a drag on performance, chief executive Greg Goodman said.
The forward workbook in Europe was strong and included quality, top-end customers that were taking advantage of market dislocations in Asia, Europe and Australia, he said.
“You will see China in 2012/13 starting to contribute in a relatively significant way,” he told a teleconference.
“Europe is a low growth environment, but with prime assets and good cash yields on the back of very low interest rates, is a very compelling reason for capital to get invested.
Operating earnings would rise to $460 million for 2011/12. That was compared to the $383.9 million posted on Thursday for the last financial year, which was a 24 per cent gain from the year before that.
The company said net profit recovered to $392 million in 2010/11 from the previous year’s $537 million loss.
The company’s stapled securities were two cents weaker at 64.5 cents on Thursday.
The contribution of the “active” components of the business – property development and management, as opposed to investments – was increasing and would contribute up to 50 per cent of earnings in the short-term, the company said.
It said it was enjoying solid property fundamentals, with occupancy rates increasing to 96 per cent, rents up three per cent and a weighted average lease expiry of 5.3 years.
Revenue surged to $929.8 million compared to $173.3 million for the prior period.
It will pay a final dividend of two cents per share, compared with 1.9 cents a year earlier.
It had $1.4 billion of development commitments across 42 projects and $1.8 billion of work in progress.
