Westfield Holdings reports 14% profit increase
13 August 2001
Westfield Holdings Limited today announced a profit after tax ofA$169.1 million for the year to 30 June 2001, up 14.0% on lastyear’s result of A$148.3 million.
Financial highlights of the year include:
Earnings per share on a fully diluted basis were 32.05 cents,up 13.9% on last year.
The total dividend payout for the year will be 16.03 cents pershare, up 13.3% on last year’s dividend of 14.15 cents. The finaldividend of 8.76 cents per share will be paid on 28 September 2001.Dividends continue to be 60% franked.
Shopping centre assets under management increased from A$21billion to A$24.5 billion.
Westfield Managing Directors, Peter and Steven Lowy, said allfacets of the business contributed to the result.
Demand for space in Westfield shopping centres in all markets continues to be solid in both existing centres and new projects and the quality of the shopping centres in the global portfolio has underpinned the performance.
The key events of the year included:
Westfield’s ongoing global redevelopment program, with projectsworth about $1.1 billion completed during the year and a further$4.9 billion either under construction or in the planningprocess.
Westfield America Trust’s acquisition of a 99-year lease of theretail component of the World Trade Center in New York which willnow be branded Westfield Shoppingtown World Trade Center. As partof the acquisition, plans have been approved for a substantialexpansion of the retail area.
The agreement by Westfield America Trust to acquire alloutstanding common shares in Westfield America, Inc. held by thepublic.
The transaction consolidates the ownership of Westfield’s USshopping centre interests in the Australian-listed WestfieldAmerica Trust resulting in a more simplified ownership structurewith better access to capital.
Westfield’s entry into the United Kingdom.
In September 2000 Westfield finalised its acquisition of sixshopping centres through a 50:50 joint venture with MEPC. Thisfollowed the acquisition of the Broadmarsh centre in Nottingham inMay 2000. Westfield now manages a portfolio of seven centres in theUK valued at 740 million (A$2.1 billion).
The launch of the Westfield Shoppingtown brand into the NewZealand market, with the opening of the redevelopment of Glenfieldand WestCity Shoppingtowns in Auckland.
Australia and New Zealand
In Australia, two projects with a combined value of $535 millionwere completed – Westfield Burwood ($300 million) in Sydney andWestfield Chermside ($235 million) in Brisbane. Stage Two of boththe Hornsby project in Sydney (project value $360 million) andFountain Gate in Melbourne (project value $190 million) were alsocompleted.
Hornsby and Fountain Gate are both due for final completion in late2001.
Plans are progressing for a number of major redevelopments acrossthe portfolio with the redevelopment of Westfield Bondi Junction inSydney due to start in the first half of next year.
In New Zealand, in October 2000 Westfield completed the NZ$100million redevelopment of Glenfield Shoppingtown in Auckland,ushering in a new style of retailing for New Zealand shoppers interms of design and facilities and the retail mix on offer.
In July 2001 work was completed on the redevelopment of WestfieldShoppingtown WestCity in Auckland. The NZ$84 million projectincluded Westfield’s branded entertainment and lifestyle precinctThe Street for the first time in New Zealand, offering shoppers amix of diverse shopping, cafes and restaurants.
Plans are being finalised for the redevelopment of WestfieldShoppingtowns St Lukes in Auckland and Queensgate in Wellingtonwhich are expected to commence later in 2001.
In the US, redevelopment projects valued in excess of US$200million were completed in the 12 months to 30 June 2001, with afurther US$1.2 billion either under construction or in the planningprocess.
In March, Stage One of the US$165 million redevelopment ofWestfield Shoppingtown Valley Fair in San Jose, California, wasopened fully leased.
Stage One features 80 new specialty stores, a new Nordstromdepartment store, food court and additional parking. Theredevelopment, which is due for completion in the first half of2002, will position Valley Fair as the premier shopping destinationin the area.
Redevelopments were completed at Independence Mall in Wilmington,North Carolina (US$55 million), Parkway in San Diego (US$14million), Annapolis (US$23 million) and Montgomery Mall (US$19million ) in Maryland.
Redevelopments are underway at Westfield Shoppingtowns Enfield inConnecticut, West County and South Country in St Louis, Missouri;The Promenade in Los Angeles and work is about to start on PalmDesert in Los Angeles.
Work is expected to begin soon on redevelopments at WestfieldShoppingtowns Oakridge in San Jose and Wheaton Plaza inMaryland.
During the year Westfield’s team in the UK was established, withexecutives from the Australian, NZ and US businesses appointed towork with UK executives to ensure the successful introduction ofWestfield’s culture and expertise.
The operational and pre-development objectives set at the time ofWestfield’s acquisition of the UK portfolio are being achieved withthe centres performing well and plans are moving forward for majorredevelopments of a number of centres.
The MEPC transaction initially involved a joint venture for 9centres, with Westfield and MEPC agreeing to sell three of theproperties because they did not fit strategically into theportfolio. Of those three, the Yate Shopping Centre and Two RiversRetail Park, Staines, have been sold and contracts have beenexchanged for the sale of Kensington Shopping Arcade. Westfield hasan 18.8% interest valued at 15 million (A$42 million) in thefund that acquired Two Rivers Retail Park which is expected to besold in the short to medium term.
Westfield’s Managing Directors, Peter and Steven Lowy, said thegrowth of the Group’s global shopping centre business is continuingand, barring unforeseen circumstances, they expected to achieveincreased profits in the coming year.