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SYDNEY (Feb 16): Australian industrial property developer and manager Goodman Group proposed on Thursday to consolidate its shares on a one-for-five basis in a bid to get their price above A$1 (RM3.27) and attract more institutional investors.
Property trusts in Australia have undertaken a series of initiatives, including share buybacks, as they focus on return on equity (ROE), a way of gauging how much profit is being made with the money shareholders have invested.
Consolidation, or shrinking the number of shares on offer, is one way of increasing the par value of each unit.
"We think that's important with (there) being a lot of offshore interest in the stock, and (to) take the volatility out of the stock," Goodman's CEO Greg Goodman told a teleconference.
Shares of Goodman were unchanged at A$0.65 on Thursday morning, compared with a drop of 0.6% in the property sector index.
The consolidation proposal will be voted on at an extraordinary general meeting on March 30.
Goodman also announced plans to add its Hong Kong incorporated company to its existing stapled structure.
"It gives us a lot of efficiency and how we deal with those profits and pay those profits out," Goodman added.
On China, where the Australian firm has ambitious growth plans, Goodman remained positive. However, it said rental growth would slow to 4-5% in the medium term from the recent robust growth of more than 10%.
"We are very happy and confident with the market and the slowdown is coming off very, very large growth rates which over time were not sustainable," Goodman said.
"There is undersupply of quality A-grade industrial warehousing," he said.
Goodman said in December it planned to invest US$1.2 billion in China and Japan over the next 18 months.
Goodman posted a 34% increase in operating profit to A$229.2 million for the six months to December from the same period last year.
It expects operating EPS (earnings per share) for the full year to June to rise 8% from the previous year. — Reuters
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