Finbar upgrades profit guidance following strong East Perth apartment sales

Strong apartment sales in two of its Perth projects have caused ASX-listed developer Finbar upgrade its profit forecast for the 2012 financial year ending June 30.

The developer now anticipates a full-year profit after tax of approximately $28 million, an increase of $4 million from previous guidance.

The $28 million profit figure would be a record for Finbar and 17% above the 2011 financial year profit of $23.5 million, also a record for the company.

Finbar says the higher-than-anticipated profit figure is “largely attributable to a strong level of sales and settlement conversions” achieved at its recently completed 18 on Plain and Fairlanes apartment projects, “along with the robust leasing take-up and valuation of the recently completed Fairlanes Office project, which the company has retained for investment income purposes”.

Fairlanes is a seven-level tower project worth $160 million on Adelaide Terrace in East Perth, which was completed in April.

The project features 128 apartments and 7,000 square metres of office space.

Managing director Darren Pateman tells Property Observer all but one of the apartments has now sold. Prices paid in the development have averaged $850,000.

The $20.5 million 18 on Plain project was completed in February and features 29 apartments on Plain Street in East Perth as well as commercial and office space.

Pateman says all residential units in 18 on Plain have been sold, with two commercial lots remaining.

Prices for two-bedroom units averaged around the $650,000 mark.

The profit guidance update has been made without Finbar receiving or relying on any future revenue generated from its Pelago West, a 113-apartment project in Karratha, in the mining-rich Pilbara region, due to be completed in June.

First settlements on Pelago West are anticipated in July.

Revenue from this project is anticipated to be included in results for the first half of the financial year ending June 30, 2013.

“We are delighted to report such a strong financial performance to our shareholders. This result highlights our key focus of capitalising on our competitive advantages and building upon our strong WA market position in challenging economic times,” says Pateman.

“Finbar stands to benefit substantially from improving economic conditions and the realisation of our first investment in the Pilbara early in the next financial year.”