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City Pacific boosts profit target, 55%-owned CP1 buys out Melbourne project partner

Published: 10 February 2005

Australian listed financial services company City Pacific Ltd said today it expected net profit after tax for the full year to June to be 68% above the previous profit, reaching $A73.5 million.

Meanwhile, the company’s 55%-owned subsidiary, CP1 Ltd, announced it was taking out its partner in an $A650 million upmarket resident, hotel & marina project on Melbourne’s Mornington Peninsula and expected to make $A180 million profit from this project over 3 years.

The $A73.5 million profit forecast would be on revenue up 95% to $A115 million.

Chief executive Phil Sullivan said City Pacific would benefit from investments made in listed development company CP1, listed project financing company Indigo Pacific Capital Ltd & the financial services business Terrain Australia Ltd.

“We have been actively diversifying our revenue streams over the last 2 years, with the results of that strategy starting to have a marked impact on the company’s result,” he said.

“The future will see a continuation of diversification of our revenue streams in our areas of interest, including the leisure business, management rights, financial services & property development.”

CP1 said it would buy out its partner in the $A650 million Martha Cove project, Fish Developments (Vic) Pty Ltd, for $A50 million. The debt-funded purchase is set to settle in May.

CP1 said profits on the project were forecast at $A180 million, spread over the next 3 years. Marina Cove is an upmarket residential development set in 17ha of waterways on the Mornington Peninsula, one hour from Melbourne. It will have 600 freehold marina berths.

In December, CP1 settled its purchase of the 2.5ha Mercure Resort site at Budds Beach on the Gold Coast for $A61 million, with plans to develop a master-planned residential precinct with listed developer Sunland Group Ltd.

City Pacific also completed the takeover of loan company Terrain Australia Ltd in December. Terrain has a trail book of $A2.832 billion in mortgage loans and is expected to write $A2 billion of new mortgage loans this year. The company has 40 mortgage broking franchises, and growth plans to reach 60 outlets by June. Terrain is also one of the largest plant & equipment finance brokers in Australia and will write about $A400 million this financial year.

Terrain booked net profit after tax of $A2.3 million in 2004 after losing $A12.5 million the previous year.

Mr Sullivan said City Pacific would pay a fully franked A15c/share interim dividend and expected to pay A30c/share in the 2nd half. The 45c payout, 12c up on 2004, would represent an 11.45% dividend yield.

Websites: City Pacific


Marina Cove


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