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Earnings lift Mirvac profit 13% to $1.16b

 

Property developer Mirvac Group's full-year profit has risen 13 per cent to $1.16 billion, driven by a strong performance in its investment portfolio and in operational earnings.

The company's revenue slid one per cent to $3.02 billion in the 12 months to June 30, from $3.05 billion in the previous year, but earnings before interest and tax grew 17 per cent to $750 million.

Mirvac's office and industrial division contributed the bulk, reporting $319 million in earnings, down roughly 11 per cent as a result of asset sales made in the previous financial year.

Its residential business delivered $302 million in earnings, an increase of 54 per cent, on the back of a high volume of lot settlements and residential gross margins above target range.

Retail contributed $156 million, up 33 per cent.

Mirvac said that despite concern over the potential impact of APRA changes to lending requirements on the residential sector, sales activity across all projects remained solid.

Chief executive Susan Lloyd-Hurwitz said that buying at the right time and in the right locations had ensured the group had strong embedded margins across a number of its residential projects, particularly in Sydney and Melbourne.

She added that Mirvac expects to benefit from infrastructure investment by the NSW and Victorian governments, with a number of the company's residential projects sited near proposed major transport lines.

The property developer expects earnings to be six to eight per cent higher in full-year results for the 2018 finance year, driven by secure yield from its investment portfolio, rental growth and attractive returns from its development pipeline.

"Our focused and disciplined urban strategy has consistently delivered stable earnings and distributions growth over the past few years and we expect full-year 2018 to be another successful year," Ms Lloyd-Hurwitz said.

EARNINGS HELP LIFT MIRVAC PROFIT:

* Net profit up 13pct to $1.16b

* Revenue down 1pct to $3.02b

* Final dividend 5.5cps, unfranked