Mirvac Group (ASX:MGR) says it will allow a $215 million provision against inventories because of slower than expected sales and oversupply and heavy discounting in regional markets.
The real estate investment company has advised the decision to dispose of zero margin projects in poor performing regional markets will allow the company to release capital for investment into profitable residential development opportunities.
Mirvac has also reaffirmed its earnings guidance for the 2011 financial year of between 10.2 to 10.6 cents per stapled security and distribution guidance of eight to nine cents per security.
In response to the floods in Queensland, Mirvac says it has experienced little impact to its residential projects across Brisbane, but is continuing to monitor the situation.
Mirvac Group posted a net profit of $237.4 million in fiscal 2010.
MGR Price at posting:
$1.27 Sentiment: None Disclosure: Held
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