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Stockland posted strong results for the 2016 financial year with underlying profit increasing by 8.5% to $660 million. This was largely driven by strong conditions for growth in the Melbourne and Sydney residential property market which led to a 38% increase in operating profit for the residential property segment. Furthermore, Stockland’s commercial property segment, which accounts for 71% of the total asset portfolio, was able to achieve a steady growth of 3% .
Stockland’s capital management has maintained its strong results despite $395 million of new debt issued from of a combination of Australia, US and European bond markets. The group continues to maintain a strong balance sheet with gearing remaining at the low end of the group’s 20-30% target range at 23.8% (up modestly from 23.1%).
Overall, Stockland is supported by its strong liquidity and solid credit metrics which should offer some protection against any potential stagnation in the property market.
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