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PROFITS from the sale of the Palazzo Versace hotel are being channelled into the pockets of Sunland shareholders as the property group today announces its first dividend in more than three years.
The Gold Coast-based property developer has delivered a half-year profit of $8.4 million, a result largely buoyed by a $7.29 million one-off tax benefit from the Palazzo Versace sale which settled late last year.
The profit result for the six months to the end of December 2012 compares with a bottom line of $185,000 a year earlier.
Sunland managing director Sahba Abedian (pictured) says a 2c-a-share special dividend has been forged from the hotel deal which was sold for $68.5 million to Chinese interests.
The payout is the first since 2009 when Sunland chose to apply its surplus cash to a share buyback program.
It only has 40.7 million shares to buy back before it resumes regular dividend payments.
Sunland’s underlying profit before tax was $1.1 million, up from just $57,000 in the previous corresponding period.
Revenue from Sunland’s property development business jumped 25 per cent to $77.4 million.
Group revenue, which includes $11.8 million from Palazzo Versace, rose 26 per cent to $99.3 million.
Abedian says Sunland’s operating result was credible in light of losses due to asset writedowns being recorded by many listed property groups.
“Fundamentally it’s a very sound result considering what’s happening in our industry,” says Abedian.
“For us to be able to report an operating profit speaks of a very sound business and the strategy deployed over the past few years.
“We’ve always announced we would resume payment of dividends after the buyback is completed.
“Our intent is to complete the buyback in the shortest period of time.”
Sunland, which has development projects under way in Sydney, Melbourne and south-east Queensland, concedes the Melbourne market is proving the most difficult for all major property developers at present.
Abedian says south-east Queensland is showing signs of recovery after a prolonged period of “consolidation”.
Sunland has a hefty warchest for further acquisitions, holding $32.2 million in free cash and $94.6 million in undrawn credit lines.
Sunland is paying its 2c special dividend on March 23, with the record date March 8.
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