REPORTING SEASON: Mirvac Group (MGR)
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Figure 1: Mirvac Group 12 month chart
Profit jumps as Mirvac (MGR) leverages a buoyant property market.
· A strong real estate market has been the main factor driving the improved performance of real estate investment company Mirvac over the last 12 months. Asset sales were the other influence with disposals across residential, commercial and industrial portfolios realising $624million. The group reported a net profit of $447.3million in fiscal 2014, an increase of 220%. Operating profit, which excludes significant items and one off items, rose by 16% to $437.8million.
· In the residential segment, MGR achieved 2,482 lot settlements, ahead of its target for sales of 2,400. MGR is positive on the property market in the medium term, particularly in Sydney where half of its new stock will be released over the next year. Despite the optimism the group is expecting only a modest rise in operating profit over the next 12 months with a result in the range of $443million to $455million. The group highlighted its exposure to non-discretionary retailing despite headwinds in leasing retail assets.
· In the Group’s outlook statement, solid growth is forecast with an expected distribution of between $0.092 and $0.094 for the 2015 financial year. MGR today announced an unfranked distribution of $0.046 per security payable on 28 August 2014, taking the full year payout to $0.09.