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Christine St Anne is Morningstar's online editor and Nicholas Grove is a Morningstar journalist.

Stockland's profit, dividend in line with forecast

Stockland (SGP) on Wednesday reported a 7 per cent fall in underlying profit before one-off items to $676.1 million for the year to 30 June 2012.

Statutory profit for the year fell 35 per cent to $487.0 million, due largely to unrealised mark-to-market adjustments on financial instruments, the property investment company said.

Underlying earnings per security (EPS) were down 4 per cent 29.3 cents, Stockland said in a statement.

The company declared a distribution per security of 24 cents, up 1 per cent on the previous year.

Both the underlying profit and distribution were in line with Morningstar's forecasts.

Gearing (net debt/total tangible assets) stood at 25.8 per cent as at 30 June, while return on equity stood at 8.2 per cent, Stockland said.

"This is a reasonable result in what continues to be a very challenging operating environment," Stockland managing director Matthew Quinn said.

"We have retained relatively low gearing and tight control of costs, and have undertaken significant restructuring to improve our efficiency in fiscal 2013.

"We have maintained our focus on improving returns through active capital management - investing the capital we release from non-core asset sales to keep our debt low, buy back shares and invest in growing our core businesses."

Stockland said it has acquired 179.5 million securities or 7.5 per cent of issued capital through its current buyback at an average price of $3.04. It plans to continue its buyback of up to 10 per cent of issued capital.

Quinn said a highlight of the result was the solid performance of Stockland's Retail division, which reflected a focus on providing value and convenience and a skew towards growing regional areas.

By division, Retail recorded operating profit growth of 3.8 per cent, while Office and Industrial recorded a 16 per cent fall in profit due to asset sales and weak demand.

Residential Communities recorded a $198-million operating profit, while the Retirement Living division saw operating profit rise $20 million to $36 million on the back of a record number of sales.