GPT Eyes Own War Chest For Future Development

The GPT Group has announced a strong 2015 Annual result, delivering a Net Profit After Tax of $868.1 million, up 34.5 per cent on the prior year, and Funds From Operations (FFO) per security growth of 5.5 per cent for the year.

GPT’s lift in profit was driven by an 11 per cent increase in FFO to $501.7 million and $432.1 million in positive revaluations to the Group’s property portfolio.

In Sydney, delivering his first results as GPT’s CEO and Managing Director, Bob Johnston said the Group’s strong performance reflected positive trading conditions in the retail and office sectors, and the continued demand for investment assets, which had contributed to a rise in portfolio values.

“GPT has delivered a solid result from its investment portfolio, Funds Management division and development activities. In addition, the Group has maintained a disciplined approach to capital management with gearing at 26.3 per cent and a low weighted average cost of debt,’’ said Mr Johnston.

In late 2015 GPT restructured the business from an operational model to a sector-based approach, with the creation of three business units: Retail; Office and Logistics; and Funds Management.

“The restructure provides a clearer focus to each of GPT’s areas of operation. It allows the Group to capitalise on its strong market position, to maximise the performance of the portfolio and secure future growth opportunities,” Mr Johnston said.

Mr Johnston said that GPT had a significant internal development pipeline and that there would be an increased focus on growing the investment portfolio through development over the next few years.

“Asset pricing in the marketplace is very strong and there’s different sorts of capital with different costs bases attached to them, particularly from offshore, who are taking a different point view to the market and pricing,” Mr Johnston told The Australian.

“We think we’ve got plenty of opportunities in the pipeline and in the investment portfolio and clearly its more accretive to be developing your own stuff ... than buying on the market. That’s where we see a lot of opportunities.”

According to The Australian high-profile opportunities include the ongoing refurbishment of Sydney’s MLC Centre office tower, in addition to significant land bank and mixed-use development sites at Rouse Hill and Sydney Olympic Park.

FY15 Financial Highlights:-Net Profit After Tax (NPAT) of $868.1 million, up 34.5 per cent
-Funds From Operations (FFO) of $501.7 million, up 11.0 per cent
-Funds From Operations per security growth of 5.5 per cent
-Net Tangible Assets (NTA) per security $4.17, up 5.8 per cent