Goodman sees signs of stability: PROPERTY trust Goodman Group has recorded an annual loss of $1.12 billion, but believes there are signs market conditions are stabilising.
According to Goodman, the loss, which compares with a net profit of $251 million in the previous financial year, was a result of property and equity investment revaluations.
The company's operating net profit fell 28 per cent to $408m for the year ended June 30, down from $567m previously.
Chief executive Greg Goodman said the priority for the recently recapitalised group was to turn its billion-dollar landbanks around the world into income-producing assets.
Mr Goodman said there was pent-up demand for quality industrial space in its markets offshore and in Australia.
Goodman was recapitalised this month through a $1.8bn capital raising and refinanced $4.1bn of debt, deferring maturities to 2012 and beyond.
And it signed up two new strategic partners.
Announcing its full-year result yesterday, Mr Goodman said the group had taken $1.5bn worth of inquiries over the past 12 months from potential clients.
"We want to make a dent on that over the next 18 months to two years," he said.
"We are doing that in the UK at the moment. We're currently negotiating on transactions in the UK, continental Europe, Asia and Australia."
Commenting on the joint venture between Woolworths and US hardware group Lowe's, Mr Goodman said the group owned land that could be suitable for the joint venture.
In 2008-09, Goodman put on hold $864m of development projects. Historically, development business contributes about $200m to $250m a year to its earnings.
Its contribution would drop to $90m in 2009-10.
But with lead time of a couple of years, development profits would start to make an impact from 2011 and 2012.
"With less competition in our markets, the margins are going to be good," Mr Goodman said.
"We'd fund development out of presales of our projects, including to our partners CIC (China Investment Corporation) and CPPIP (Canadian Pension Plan Investment Board).
"The beauty of our business going forward is that we are not just Australia-centric. We have a good footprint and a good brand; we can now leverage that over the medium term."
He said it was one of few companies that had an intact global platform.
"If we do that well and successfully, the earnings will start to come through over the next 12 to 18 months," Mr Goodman said.
Goldman Sachs JBWere's A-REITs analyst, Peter Zuk, said a key driver to growth was freeing up its land and work in progress on its balance sheet.
"This will improve liquidity and provide funding for other growth initiatives," he wrote in a client note.
Mr Zuk said on a fully diluted basis, assuming Macquarie Group and CIC converted their options, Goodman's earnings per share would fall to 5.2c per security, against the company's guidance of 5.7c.
Goodman declared a distribution per security of 9.65c.
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