Westfield Holdings reports 23% profit increase
28 August 2003
Westfield Holdings Limited (Westfield) today announced a profit after tax of $288.4 million for the year to 30 June 2003, up 23.1% on last year’s result of $234.2 million.
Financial highlights of the year included:
- Earnings per share on a fully diluted basis was 50.63 cents, up 21.7% on last year;
- Earnings Before Interest and Tax (EBIT) was $401 million, up 13.6% on last year;
- Return on Equity of 18.6% compared with 16.7% for last year; and,
- The total dividend payout for the year will be 25.57 cents per share, up 21.5% on last year. The final dividend of 13.55 cents per share will be paid on 30 September 2003 and will be 50% franked.
Westfield Managing Directors Peter and Steven Lowy said “All parts of the business are performing well. The business has grown considerably over recent years through development work and new acquisitions, and we are particularly pleased with the integration of the new properties into the portfolio.”
Westfield continues its expansion of the business with the recent highlights including:
- Westfield Trust’s $1.9 billion takeover of AMP Shopping Centre Trust (ART);
- The addition of a net six shopping centres to Westfield’s management portfolio with a value of $1.2 billion;
- The completion of $840 million of development projects; and,
- The receipt of outline planning consent for three major development projects totalling 780 million in the United Kingdom.
During the year $2.6 billion was added to the development pipeline of projects under construction or in the advanced planning process, which now stands at $6.4 billion. In addition, future opportunities in excess of $5 billion have been identified.
Westfield now operates 115 shopping centres comprising 17,500 retail outlets and over 8.7 million square metres of retail space. The value of shopping centre assets under management is currently $31.7 billion.
Australia and New Zealand
In Australia and New Zealand, since 30 June 2002 redevelopment projects valued at $290 million were completed at Eastgardens (Sydney), St Lukes (Auckland), Fountain Gate Homemaker Centre (Melbourne), North Lakes (Brisbane) as well as a number of smaller projects.
Projects with a value of $2.4 billion are either under construction or in the advanced planning process, an increase of $540 million since June 2002.
Projects under construction include the major redevelopment of Westfield Bondi Junction, which is progressing well and is expected to be completed, ahead of schedule, in mid 2004 as well as the redevelopment of Whitford City in Perth, which is nearing completion.
Planning work is also well advanced for new projects including Doncaster (Melbourne), The Pines (Melbourne), Centrepoint (Sydney’s CBD), Liverpool (Sydney), Innaloo (Perth), Queensgate (Wellington) and Riccarton (Christchurch).
Since June 2002, Westfield has been appointed the developer and manager of the following properties:
- Two Double Seven shopping centre in Newmarket, Auckland valued at NZ$193 million;
- Sydney Central Plaza in the major retail precinct of Sydney’s CBD, valued at $401 million;
- Mt Gravatt in Brisbane and Kotara in Newcastle valued at $745 million; and,
- Bay City Plaza in Geelong valued at $153 million.
Both the Newcastle and Geelong centres represent new markets for Westfield.
As part of the ART acquisition, Westfield Trust also acquired ownership interests, in joint venture with AMP, in an additional six high-quality Australian shopping centres and sold Toombul (Brisbane) and Galleria (Perth).
The Australian and New Zealand portfolios continued to perform well with comparable specialty store sales increasing by 6.5% and 2.3% respectively for the year. Occupancy levels remain in excess of 99.5%.
Westfield currently manages 46 properties in Australia and New Zealand with a value of $13.4 billion, comprising 2.6 million square metres of retail space and 8,000 retailers.
In the United States, since 30 June 2002 redevelopment projects valued at US$370 million were completed at Westfield Shoppingtowns West County (St Louis, Missouri), South County (St Louis, Missouri), Palm Desert (Palm Springs, California), Great Northern (Cleveland, Ohio) as well as a number of smaller projects.
Since the acquisition of the Jacobs and RNA portfolios in 2002, Westfield has been concentrating on opportunities to expand and improve both its preexisting portfolio and recent additions. Projects with a value of US$1.4 billion are either under construction or in the advanced planning process, an increase of US$515 million since June 2002.
Major projects currently under construction include Oakridge (San Jose, California) which is expected to be completed by late 2003 and Santa Anita (Los Angeles, California), which is expected to be completed by late 2004. Work has recently commenced at Franklin Park (Toledo, Ohio) and Wheaton (Wheaton, Maryland) both of which are expected to be completed by mid 2005.
Construction is expected to begin shortly on the San Francisco Centre / Emporium project. The completed centre is expected to be one of the preeminent downtown retail destinations in the US.
Planning is also well advanced for new projects including Topanga and Century City (Los Angeles, California), Connecticut Post (Milford, Connecticut) and Parkway (San Diego, California).
Since June 2002, Westfield has been appointed the developer and manager of US$196 million of properties at Fashion Square Sherman Oaks (Los Angeles, California) and Southgate Plaza (Sarasota, Florida).
In addition, Westfield America recently announced an agreement to acquire a 33.3% joint venture interest in “The Shops at North Bridge” located in downtown Chicago with the John Buck Company and Morgan Stanley, valued in total at US$315 million. Upon completion of the acquisition, Westfield will be appointed the developer and manager of the property, which will become the fifth Westfield Shoppingtown in the Chicago market.
The US portfolio continued to perform well with the occupancy level being maintained at 93%, the same level as at June 2002. Comparable specialty store sales decreased by 0.5% against those recorded in the six months to June 2002. However, for the three months to June 2003 comparable specialty store sales increased by 1.3% compared with the same period in 2002.
Westfield now manages 62 properties in the United States with a value of US$10.4 billion, comprising 5.9 million square metres of retail space and 8,800 retailers.
During the year, considerable progress was made with the UK redevelopment program. Outline planning consents were obtained for 780 million of redevelopments at The Eagle Centre (Derby), The Broadmarsh Centre (Nottingham) and Brunel Centre (Swindon).
The Westfield UK portfolio continued to perform well with occupancy levels in excess of 99%. Retail sales in the UK generally remained strong throughout the period, up approximately 3% on a like-for-like basis for the year. This has been reflected in the sales achieved in Westfield centres.
Work is progressing well on the funding structure for the UK portfolio which is expected to be in place before major works begin on the UK redevelopment program. This is consistent with our focus on continually improving return on equity.
Westfield now manages seven properties in the UK with a value of 800 million, comprising 700 retailers and 250,000 square metres of retail space.
The Funds Management business continued to perform well with both Westfield Trust and Westfield America Trust achieving their distribution forecasts.
Westfield Trust, Australia’s largest listed property trust, recently announced a net profit after tax for the half year to 30 June 2003 of $258 million, an increase of 10.0%. This represented a 4.2% increase in distributions per unit. Westfield Trust also increased its distribution growth per unit forecast for the full years ended 31 December 2003 and 2004, to 4.5% and 4.0% respectively, as a result of the expected positive impact of the ART acquisition.
Westfield America Trust, Australia’s second-largest listed property trust, recently announced a net profit after tax for the half year to 30 June 2003 of $270 million, an increase of 65.3%. This represented a 3.4% increase in distributions per unit. The profit increase was primarily due to the impact of the RNA and Jacobs acquisitions together with income growth from existing assets.
Westfield Managing Directors Peter and Steven Lowy said that the major transactions recently undertaken, the integration of the new properties into the portfolio and the continuing growth in property management, funds management and the development program provide a strong basis for sustained EBIT and after tax profit growth.
Barring unforeseen circumstances the directors expect profits to increase in the coming year.