Westfield Holdings reports 38.5% profit increase
21 August 2002
Westfield Holdings Limited today announced a profit after tax of $A234.2 million for the year to 30 June 2002, up 38.5% on last year’s result of $A169.1 million.
This result exceeds the profit of $A230 million foreshadowed in March this year.
Financial highlights of the year included:
- Earnings per share on a fully diluted basis were 41.6 cents, up 31.2% on last year.
- The total dividend payout for the year will be 21.05 cents per share, up 31.3% on last year’s dividend of 16.03 cents.The final dividend of 13.0 cents per share will be paid on 30 September 2002. This dividend is 40% franked.
- The value of shopping centre assets under management is currently $A31.5 billion, up 30.7% on last year.
During the year the $A6 billion Jacobs and RNA transactions were completed by Westfield America Trust and the Centrepoint complex in Sydney was acquired by Westfield Trust, adding a further 23 properties to Westfield’s management portfolio. The centres have very good redevelopment potential – some $A3.0 billion, over the next five to 10 years.
Westfield Managing Directors Peter and Steven Lowy said this strong result was due to significant expansion of the company’s business in the United States and good performances from all parts of the Westfield operations in the UK, Australia and NZ and the US.
The last 12 months have witnessed significant and company-transforming events for the Westfield Group.
During the period we have expanded the portfolio significantly, from 86 to 109, and have continued to export the Westfield model of shopping centre management and development into our businesses globally.
Over the last year, Westfield’s global development program continued with $A1 billion of projects completed during the financial year. At 30 June 2002, the Group’s development pipeline increased to $A5.0 billion, representing projects either under construction or expected to occur over the next five years.This program does not include the Jacobs, RNA and Centrepoint projects referred to above.
Australia and New Zealand
In Australia and New Zealand, redevelopment projects valued at $A696 million were completed in the 12 months to 30 June 2002, with a further $A1.8 billion either under construction or in the planning process.
During the year, Westfield successfully completed two projects – the $A377 million Hornsby project in Sydney, and the $A196 million project at Fountain Gate in Melbourne.The $A100 million redevelopment of Eastgardens in Sydney, also progressed well and is expected to be completed by December this year.
In April the $A680 million, 100,000 square metre redevelopment of Westfield Bondi Junction in Sydney commenced. Construction is also set to commence on the first stage of a new shopping centre at North Lakes, in north Brisbane.
In November, the Westfield Trust acquired the landmark Centrepoint complex in Sydney from AMP. Since assuming management Westfield has introduced its branding and intense management to this high-traffic location in the Sydney CBD and work is progressing on a number of improvements to the retail mix including plans for future redevelopment.
The $NZ55 million redevelopment of the St Lukes shopping centre in Auckland is well under way following the completion in July 2001 of the $NZ80 million redevelopment of WestCity Shoppingtown.
The Westfield Trust recently announced a new joint venture in New Zealand which will facilitate the development of a major new shopping centre at Newmarket in Auckland.
In the United States, redevelopment projects valued at approximately $US171 million were completed in the 12 months to 30 June 2002, with a further $US870 million either under construction or in the planning process.
The second and final phase of the $US175 million redevelopment of Westfield Shoppingtown Valley Fair in San Jose, California was opened successfully in March 2002. Valley Fair is one of Westfield America Trust’s flagship malls in the US.
Phase two of the $US57 million redevelopment of Westfield Shoppingtown South County in St. Louis will be completed this month.
The $US237 million Westfield Shoppingtown West County redevelopment, also in St. Louis, is nearing completion and will open in September 2002 – two months ahead of schedule.
The $US134 million redevelopment of Westfield Shoppingtown Oakridge, in California, started earlier this year.
Since acquiring the Jacobs and RNA portfolios the Westfield branding, operating and management systems have been successfully implemented in the new centres. A direct result has been the improvement of occupancy rates of both portfolios by approximately 1% in the two months since Westfield assumed management.
The seven centres in Westfield’s United Kingdom portfolio continued to perform well and in line with expectations. Westfield has now been in the UK for two years and is pleased with the progress of the centres which are meeting income expectations following the successful introduction of Westfield’s systems.
The UK retail market generally remained strong, with sales growing on average by 8%or 5% on a like-for-like basis for the year. Specialty shop occupancy levels in Westfield centres are in excess of 98%, compared with 96.5% at 30 June 2001, and 95% at the time of acquisition.
There has been considerable progress in pre-development work with a focus on working with major retailers, local authorities and community groups.
Westfield obtained its first approval in the UK in late July 2002 when it received outline planning consent for a 200 million ($A580 million) redevelopment of the Eagle Centre at Derby in the UK. This is a first, but very significant step in Westfield achieving its redevelopment objectives for the UK portfolio.
Planning applications have also been lodged for the redevelopment and expansion of four other shopping centres in the UK at Nottingham, Guildford, Swindon and Belfast. In total, the five redevelopments represent 4.6 million square feet of retail space which would double the leasable area of the company’s UK portfolio.
Westfield’s Managing Directors Peter and Steven Lowy said the major transactions in the United States and Australia and the progress in the UK provided a global platform which would add considerable value to the Group’s business and provide the basis for growth in the future.
Barring unforeseen circumstances directors are looking forward to increased profits in the coming year.