Wheelock Properties

Wheelock Properties: 4Q14 net loss widened to $103.1m from $91.3m a year earlier, taking FY14 net profit to $43.1m (+7.7%).

Revenue for the quarter fell 7.2% to $26.9m, on lower sales recognition of Ardmore Three and lower dividend income from its investments following the disposal of its stake in Hotel Properties to an associate in 2Q14. Gross margin rose 6.9 ppt to 87.3%

The group’s bottom-line was however depressed by write-downs on the book values of Scotts Square (-$52m) and Fuyang project in China (-$75m).

The write-down in Fuyang project was due to a slower pace of development in the project’s broad neighbourhood, resulting in uncertain market conditions and timing of the project, while Scotts Square continues to operate under very challenging circumstances as a boutique mall.

Going forward, Wheelock guides that FY15 is likely to remain challenging for development properties, although performance of the group’s prime investment property, Wheelock Place, is expected to be stable. Scotts Square Retail meanwhile will be revamped with new tenants and concept.

Construction for The Panorama is in progress and targeted for completion in 2016, with sale of the units still on-going, while phase 1 construction for the Fuyang project is in progress and is expected to be completed in 2016.

Wheelock has declared an unchanged first and final DPS of 6¢, representing a 3.2% yield.

At the current price, the group trades at 0.71x P/B.