WESTFIELD GROUP REPORTS HALF YEAR EARNINGS OF $800 MILLION, UP 31% ON PREVIOUS PERIOD
15 Aug 2012
The Westfield Group (ASX:WDC) today announced its half year results to 30 June 2012 with AIFRS net profit of $800.1m, up 31% on the previous corresponding period. Funds from Operations (FFO) were $751.2m representing 32.8 cents per security, up 3.1% on the previous corresponding period.
Westfield Group Co-CEOs, Peter Lowy and Steven Lowy AM said: “In November 2010, we outlined a strategic plan that positioned the Group to generate greater shareholder value. The first step was the establishment of the Westfield Retail Trust (WRT) and since then we have implemented the strategic plan through a number of transactions. These results highlight the benefits of this strategy.”
During the first half, the Group completed a number of transactions raising $4.8bn of gross proceeds, including the joint venture of 12 assets in the United States and the divestment of 12 non-core assets.
“The implementation of the plan has provided the Group with approximately $10bn of capital for redeployment into higher return opportunities,” the Co-CEOs said.
Distribution for the six months was $558m representing 24.75 cents per security, an increase of 2.3% on the previous corresponding period.
During the period, the Group commenced an on-market buyback of WDC securities. To date, 48.5m securities have been purchased for $440 million.
Return on contributed equity was 11.4%, on an annualised basis, for the period.
The Group also raised and extended $3.3bn of debt facilities including the recent 450m public bond issuance in the United Kingdom. The Group has a gearing ratio of 31.9% and available liquidity of $7.1bn.
The Group confirms its 2012 forecast for FFO of 65.0 cents per security and Distribution of 49.5 cents per security.
“We are confident in the future of the Group’s business model and opportunities for growth. We continue to pursue our strategic plan focussed on investing and developing world class iconic retail destinations in major cities globally that are highly productive, create strong franchise value and are resilient through economic cycles. We continue to assess new investment opportunities both in existing and new markets,” the Co-CEOs said.
For the half year, comparable net property income in local currency was up 2.5% in the United States, up 3.3% in Australia / New Zealand and steady in the United Kingdom.
The operating performance saw income growth and comparable specialty sales growth in each region, reflecting the high quality portfolio globally.
The portfolio at 30 June 2012 was 97.5% leased, with Australia / New Zealand over 99.5%, United States at 92.7%, the United Kingdom at over 99% and Brazil at 95.8%.
For the half, comparable specialty retail sales were up 8.7% in the United States, up 0.8% in Australia, up 1.1% in New Zealand and up 11.7% in Brazil.
“Our most recent highlight was the performance of Stratford City that was showcased to the world during the London Olympics. In total, approximately 5.5 million visits were made to our centre in just over two weeks, giving the Group an unprecedented exposure to a global audience,” Steven Lowy said.
The Group’s two world class centres in London are, this year, expected to attract around 60 million customer visits spending some 1.8bn.
During the half, the Group continued to progress its Digital Business strategy with the establishment of a digital team based in the San Francisco Bay Area, the global hub of innovation and digital technology.
“Westfield is unique in the retail property industry with a recognisable brand and with 1.1 billion customer visits each year generating over $40bn in annual retail sales. We are focussed on utilising our global position to innovate the retail ecosystem and leverage the social, mobile and digital market opportunities that converge the digital shopper with the physical world,” Steven Lowy said.
During the half year, the development of Westfield Sydney was completed and the centre continues to trade successfully with now the highest specialty sales productivity in WDC’s global portfolio.
Currently $1.5bn of projects are under construction with the Group’s share being $1.2bn. To date, the Group has invested $500m in these projects.
At Carindale in Brisbane, the $310m expansion successfully opened last week. At Fountain Gate in Melbourne, Stage 1 of the $340m project successfully opened in May with the remainder of the project on track for completion in September. At UTC in San Diego, the US$180m project is on schedule to open by the end of this year.
During the half year, WDC commenced work on $775m of new projects including the development of the World Trade Center, the redevelopment at South Shore in New York and $80m of smaller projects. The Group expects to commence over $500m (WDC share between $100m and $200m) of new projects in the 2nd half of 2012.
“At the World Trade Center, we will be creating a world-class, iconic shopping experience for New York City of the calibre of Westfield’s other landmark projects in London, Los Angeles, San Francisco and Sydney,” Peter Lowy said.
The identified pipeline of future development work is approximately $11bn, of which the Group’s share is between $5bn and $6bn. The Group expects to commence between $1.25bn and $1.5bn of new developments in both 2012 and 2013.
Please click on the following links to view Westfield Stratford City during London 2012 Olympic Games:
The Westfield Group (ASX Code: WDC) is an internally managed, vertically integrated, shopping centre group undertaking ownership, development, design, construction, funds/asset management, property management, leasing and marketing activities and employing over 4,000 staff worldwide. The Westfield Group has interests in and operates one of the world’s largest shopping centre portfolios with investment interests in 109 shopping centres across Australia, the United States, the United Kingdom, New Zealand and Brazil, encompassing around 23,700 retail outlets and total assets under management of A$61.7bn.
This release contains forward-looking statements, including statements regarding future earnings and distributions. These forward-looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this release. You should not place undue reliance on these forward-looking statements. These forward-looking statements are based on information available to us as of the date of this presentation. Except as required by law or regulation (including the ASX Listing Rules) we undertake no obligation to update these forward-looking statements.