vested
Stamford Land reported headline net profit of SGD27.1m for FY14, a decline of 14% yoy.
Stripping out revaluation gains from its Perth office property in the prior year, we estimate core earnings growth of 20%.
Notwithstanding a weaker AUD, Stamford’s hotel division comprising 7 hotels in Australia and one in New Zealand, delivered a 6% rise in operating profit to SGD40.1m on the back of a recovery in its Adelaide hotels and higher occupancies.
Its property division reported higher turnover of SGD48m (+118% yoy) from sale at its Auckland project (Stamford Residences Auckland) and Sydney (Stamford Residences Reynell Terraces).
Taking advantage of a strong residential market in Sydney, Stamford Land has substantially sold its upcoming project Macquarie Park Village, a re-development of its North Ryde hotel property. However, revenue and profit recognition will only commence in 2017 on completion.
Meanwhile, the group has obtained development approvals for the redevelopment of its Sir Stamford Circular Quay hotel and Dulwich Hill property, and we expect these projects to be progressively launched over the course of the next 12 months.
The group maintained an unchanged payout of SGD 3 cents,translating to a dividend yield of 5%.
We reiterate a BUY on the stock with a TP of SGD0.73, premised on a 30% discount to its RNAV of SGD1.04.
Source: DMG