Sunland half-year results: Company to continue with share buyback program amid challenging market

Sunland is continuing with its cautious market approach, announcing another share buyback as it deals with challenging conditions in the housing sector.

SUNLAND is continuing with its cautious market approach, announcing another share buyback as it sells off assets and deals with challenging conditions in the housing sector.

The Brisbane-based company announced this morning that revenue fell 69 per cent for the six months to December 31, compared to the prior period.

Its net profit was down 18.8 per cent to $9.362 million.

Sunland also announced it would ask shareholders in April for approval for an offmarket share buyback of up to 25 per cent of the company’s issued share capital.

Sunland listed Mariner’s Cove for sale last year. Picture: Sunland Group

It said it would use funds generated by asset sales for the buyback, which was because the “inherent value in the business is not being recognised by the market with the share price persisting well below the value of group net tangible assets”.

Net tangible assets per share were $2.61 compared to yesterday’s closing share price of $1.695.

The buyback would be worth up to $60 million and follows the company buying back 4.1 million shares last year for $6.5 million.

Sunland has recently focused on selling off its assets, including the Lakeview Retail Centre in Mermaid Waters, which sold for $20 million mid-last year.

Sunland says it has seen strong presales at its Gold Coast projects, including 272 Hedges.

It also listed the Mariner’s Cove retail village and marina for sale last year as well as announcing it had sold the balance of its land at The Heights in Pimpama for $29.7 million.

Sunland said it recorded 84 lot settlements in 1H20 compared to 270 for the previous period.

The largest Gold Coast contribution came from The Heights in Pimpama.

Sunland currently has three multistorey unit developments under construction on the Gold Coast, including a high-rise tower at 272 Hedges Ave, Magnoli Apartments in Palm Beach and The Lanes Residences in Mermaid Waters.

It said it had observed improved consumer sentiment in the final quarter of the past year, which was reflected in strong sales to owner-occupiers.

“The group is mindful of the changing trends in consumer buying behaviour noting that the increase in the owner-occupier segment of the market (such as) Magnoli Apartments at Palm Beach has been a strong example of this trend with an upsurge local sales in the past three months alongside 272 Hedges Ave at Mermaid Beach,” managing director Sahba Abedian said.

An artist impression of the Sky Villas in Sunland's 272 Hedges Ave tower. Picture: Sunland Group

Presales totalled $250 lots for a combined value of $264 million for the first half, which was significantly higher than last year’s result of 211 lots for $214 million.

Sunland said it had observed difficulties for first-home buyers obtaining finance, however the ‘downsizer’ market remaining strong.
“Sunland is focused on establishing the group for the next phase of the cycle and strategically positioning the company for the subsequent growth period,” Mr Abedian said.