Stockland (SGP)

By Jason Fittler

On Tuesday, Stockland said it expected underlying earnings per share (EPS) for fiscal 2013 to be at the lower end of a previous guidance range. This means a fall of between 10 to 15 per cent on the previous year.

At a first-quarter investor briefing, the property investor and developer attributed the downgrade to ongoing challenges in the Victorian residential market.

It also said an improvement in this market was unlikely any time soon.

Stockland said the fall in EPS will be even greater in the first half, primarily due to a large skew to the second half in the company's Residential business.

Group Executive and CEO of the Residential business, Mark Hunter, said market uncertainty and a lack of consumer confidence were continuing to present challenging market conditions, which were particularly apparent in the Victorian residential market.

Chief Financial Officer Tim Foster reiterated that Stockland is confident earnings will improve from fiscal 2014, buoyed by the contribution of new retail developments and a strong residential pipeline. 

They expect that fiscal year 2013 will be the low point in its earnings; it was decided to hold its fiscal 2013 distribution at 24 cents a share, even though this will be above its target payout ratio.

Fiscal 2013 is a key year in the delivery of the first stage the substantial redevelopment pipeline that will provide an innovative, robust approach to defining retail mix so to deliver resilience and growth. 

For more information on Stockland (SGP) please contact us on 07 4771 4577.