FKP won’t make 10pc growth target

FKP Property Group said it is now unlikely to hit its target of 10 per cent earnings growth forecast for the current financial year.

Having released its net profit of $150 million for the 2007-08 year on August 28, the group announced yesterday that earnings for the coming 12 months were now unlikely to change.

“With the unprecedented turmoil in global capital and credit markets in the past two weeks, it is reasonable to assume there will be some effect on the property markets, and this makes it hard to read the year ahead with certainty,” the statement said.

FKP believes it prudent to advise that, at this time, an operating profit after tax in line with last year’s result [$150 million] is a more realistic outlook, still subject to there being no undue delays in regulatory approvals [for new projects],” it said.

The warning comes as the retirement property and aged-care sector undergoes significant changes.

In June, Lend Lease made an informal $1.3 billion offer for FKP, which was rejected.

A three-way tie up of BBC, FKP and Lend Lease would create a formidable player in the retirement home sector.
BBC owns and manages 56 retirement villages and 29 aged-care centres in Australia and New Zealand, with about 10,000 retirement units and 2200 beds.

FKP is its biggest competitor, with a 3 per cent market share. Another player, Prime Retirement and Aged Care Trust, which has also made an offer for BBC, owns more than 4600 retirement resort units and 770 aged care beds.

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