Westfield Holdings profit up 23%

26 August 1999

Countries: Australia

Westfield Holdings Limited today announced a profit after taxfor the year to 30 June 1999 of $126.5 million, up 23.2% on lastyear’s result of $102.6 million.

The result represents the 39th consecutive profit increase sincethe Westfield Group listed in 1960.

Financial highlights for the year include:

  • Earnings per share on a fully diluted basis were 24.35 cents up20.3%, on last year.
  • The dividend pay-out for the year, including the final dividendof 6.69 cents per share to be paid on 30 September, will be 12.28cents per share, up 18.1% on last year’s dividend of 10.40 cents.The dividend continues to be 60% franked.
  • Earnings before interest and tax (EBIT) increased by 22.9% from$164.4 million to $202.0 million this financial year.
  • Profit before tax increased by 22.1% from $138.0 million to$168.5 million this financial year.
  • Sales revenue for 1998/99 was $782.9 million, an increase of41.2% on the previous year’s figure of $554.5 million.

Westfield managing director David Lowy said Westfield was movinginto its 40th year with confidence.

“We are achieving strong results from all key areas of thebusiness,” Mr Lowy said. “We have a clearly defined strategy andthe management skills to implement that strategy.”

Other highlights for the year include:

  • consolidation of the large development program in Australia andgroundwork laid for extensive programs in the United States and NewZealand;
  • integration of the shopping centres purchased from TrizecHahnin the U.S. into the Group’s management portfolio;
  • establishment of the “Westfield Shoppingtown” brand throughoutthe U.S. operations;
  • increased presence in New Zealand following Westfield Trustbecoming the major shareholder in the St Lukes Group;

Westfield Holdings has $16.7 billion of shopping centre assetsunder management, comprising 80 shopping centres in total with 29in Australia, 39 in the United States, 11 in New Zealand and one inMalaysia. The portfolio contains 5.6 million square metres ofretail space and 11,900 retailers.

In Australia, redevelopment projects worth $1.3 billionare currently underway at Westfield Shoppingtowns Chatswood andBurwood in Sydney; Chermside in Brisbane; Southland and AirportWest in Melbourne; Carousel in Perth; and Arndale in Adelaide.

Three projects were completed during the year involvingredevelopments at Indooroopilly and Strathpine in Brisbane; andBelconnen in Canberra.

In April, Westfield opened The Street, a new entertainment andleisure concept which is the first stage of the Southlandredevelopment project. The Street reflects Westfield’s philosophyon the benefits of merging retail with entertainment to boost salesfor the whole shopping centre.

“This is a leading strategy for Westfield’s developments,” MrLowy said, “creating a total out-of-home experience thatsuccessfully competes with all of the other experiences on offer inthe marketplace and keeps people coming back again and again.”

Planning is advancing for the major redevelopments of WestfieldShoppingtowns Fountain Gate in Melbourne, and Hornsby and Bondi inSydney.

In the United States, with the integration of theshopping centre portfolio acquired from TrizecHahn in the secondhalf of 1998, Westfield America, Inc. became the biggest shoppingcentre owner in California and the fourth largest regional mallREIT in the U.S. overall.

The majority of the shopping centres under management areclustered into six key regional markets which has facilitatedbranding the shopping centres as Westfield Shoppingtowns.Westfield’s branding strategy is supported by regional advertisingcampaigns, signage and consistent customer service programs acrossthe portfolio.

During the year, Westfield America progressed the US$1.3 billion(A$2.0 billion) redevelopment program for its portfolio. Theprogram includes four major redevelopments – of these, WestfieldShoppingtown Valley Fair (San Jose, California) commenced duringthis financial year; West County (St Louis, Missouri) is due tocommence during the 1999-2000 financial year with Wheaton (Wheaton,Maryland) and Topanga (Los Angeles, California) in advancedplanning.

Five smaller projects were completed during the year: WestfieldShoppingtowns Eastland (West Covina, California); Mission ValleyWest (San Diego, California); South Shore (Bayshore, New York);Enfield (Enfield, Connecticut); and the first stage of Annapolis(Maryland).

In addition to Valley Fair, five projects are currently underway- Mid Rivers and Crestwood in St Louis, Missouri; Connecticut Postand Meriden in Connecticut; and the second stage of Annapolis inMaryland which will have a new leisure and entertainmentprecinct.

In New Zealand, Westfield is working with the St Lukes Group toplan a NZ$500 million (AUS$400 million) development programdesigned to increase the market penetration of the shopping centresand introduce new concepts in lifestyle and entertainment retailingfor New Zealand shoppers.
The first major project is a NZ$100 million redevelopment ofGlenfield which will be the largest shopping centre on Auckland’snorth shore.
This program also includes the Queensgate Shopping Centre in LowerHutt, Wellington, purchased in April for NZ$135 million, which willbe expanded into a regional shopping centre.

Future Outlook

“We are very pleased with this result and believe the company iswell placed for further profit growth in the coming year” Mr Lowysaid.