Australand Property Group (ASX:ALZ) has reported a 17% increase in June-half profit to $84.8 million, in a result attributed to careful cash management.
The company grew combined development ebit 12% year-on-year during the half, with the residential sector accounting for $25.7 million of total ebit and commercial and industrial sales generating $12.9 million.
Australand managing director Bob Johnson acknowledged that trading conditions softened in the second half of the period due to weakened consumer and business confidence.
But he said that “residential sales and contracts on hand remain in a healthy position and our office and industrial investment portfolio remains well leased.”
The 1H growth was achieved partly due to “a strong focus on prudent capital management,” Johnson said, using as an example a $170 million issue of guaranteed senior notes into a US debt market in May.
Gearing of 30.7% is also well within Australand's target range of 25%-35%, the half-year results show.
Australand said it will take a cautious outlook for the rest of the year due to depressed consumer spending, but maintained its target of earning 60%-70% of group ebit for the year from recurring earnings.
The company also affirmed its distribution target of 21.5 cents for the full year – up 5% from 2010 - having announced out a 10.5 cent interim dividend last month.
ALZ shares fell 1.5% in Wednesday's trading to $2.620.