Press Release - Year End Financial Results

Press Release - Year End Financial Results

28-Aug-1998

PROFIT UP 10%

The Joint Chairman of Thakral Holdings Limited, Mr Ted Harris, today announced an after tax profit of $26.7 million for the year ended June 30, 1998 compared to $24.2 million in the previous period. This is an increase of $2.5 million or 10.3%.

Total revenue for the year was $207.1 million compared to $198.7 million for the previous year ­ an increase of 4.2%.

A final dividend of 2.7 cents per stapled security has been declared. This is an increase of 0.2 cents per stapled security over the final distribution last year. The total distribution for the year is 5.2 cents and is 12% tax free, 88% tax deferred.

Mr Harris said: "The record result for the Group has been achieved in the face of difficult trading conditions and reflects the Group's diversified investments both in terms of property type and geographic spread". The Group holds investments in hotels, shopping centres, commercial offices and public car parking principally associated with the hotels.

The operating profit of the Hotel Division was $35.6 million ­ the same level as last year. Average room rate rose slightly to $130 compared to $128 in 1997. Occupancy fell from 77% to 75%. This result underlines the varying trends across the country. Sydney and Melbourne properties performed satisfactorily. Tasmania, Adelaide and Wollongong had strong results. Darwin and the Gold Coast, as predicted in previous releases, fell markedly. The Pacific Bay Resort improved its performance. It was opened in September 1996.

The Retail and Commercial Division achieved a profit of $12.2 million, which was an increase of 9% on the previous period. Vacancies at all our properties are below 2.5%.

The Company's Hotel Management subsidiary, All Seasons Hotels, made an operating profit of $1.3 million compared to $900,000 in 1997. All Seasons now manage 27 hotels with 3,603 rooms. During the year All Seasons successfully opened the new Alexandra Beach Hotel, the Grand and Paragon Hotels in Melbourne and signed management agreements for 3 new properties.

Thakral has, during the year, continued with the successful development of land at Pacific Bay. Sale of all apartments has now been completed, and only 4 lots remain in the Southern Land subdivision. Subdivision of the Northern Land, which enjoy spectacular ocean views, was recently completed and the sales campaign is proceeding. Thakral is now moving to develop townhouses on ridges to both the North and South of the resort. In total, Thakral own some 91ha of land that is expected to produce over 400 dwellings. These will be developed in stages to meet demand over a 5 to 10 year period.

During the period, Thakral has entered into joint ventures to undertake developments at Glenwood, in Sydney's west, Pittwater at Newport and recently, signed joint venture agreements to undertake a 225 unit development in the inner city suburb of Newtown.

These activities are all being undertaken in a structured form with emphasis on minimising risks to the Group. We see selective property development as a growing area of our business.

Thakral's associated trust, Pacific Century Hotels (PCH), a 50% joint venture with Thakral Corporation Limited, a Singapore listed company, made a strong contribution to the group's results contributing $2.7 million to operating profits, up from $1.5 million in 1997. The result reflects a full year's ownership of the Melbourne Hilton on the Park and the reopening of All Seasons on Crown in Sydney. During the year, PCH acquired a property in Castlereagh Street, Sydney. It is proposed that this property will, over time, be redeveloped. Currently the property is tenanted and we are working with Sydney Council to achieve a development approval for the site.

Interest expense reduced significantly during the year reflecting the effect of the Group's refinancing coupled with the lower interest rate environment.

In summary, 1998 has been another strong year for the Group. Whilst we are operating in an increasingly volatile tourist market and there are some Australian regional markets experiencing over supply and the adverse repercussive effects of Asia, given the national spread and diversity of our product we are committed to a continuing improvement in performance.


THAKRAL HOLDINGS GROUP

Year Ended 30 June                  1998          1997                 % Change
Total Revenue                           $207.1m       $198.7m                4.2%
Profit After Tax                          $26.7m         $24.2m                10.3%
Earnings per Stapled Security      5.5 cents      5.3 cents               4%
Distribution per Stapled Security  5.2 cents      5.0 cents               4%


Further information:
John Schaap
Managing Director and CEO
(02) 9272 8888

Ted Harris
Joint Chairman
(02) 9358 3200

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