Poor timing blamed for slump

Poor timing of development deals has been blamed for an 86 per cent drop in full-year after-tax profit by Singapore-based listed Trans Tasman Properties.

The developer, which transferred its headquarters from Auckland to Asia a year ago, said the drop in earnings was caused by the non-completion of developments.

"No projects came to fruition last year," said Trans Tasman executive Rod Hodge. "You can appreciate that in development there's a time cycle, and if they are not completed during the financial year you are not going to get any profits.

"The result was expected and is in context with where our business has gone in the past year. We've totally restructured and are reliant on development earnings and we had no developments during the year."

Asked if he was happy with the result, he refused to say.

Post-tax profit dropped from $30.7 million to $4.3 million and pre-tax surplus was down 96 per cent, from $28 million to $1.5 million. Unrealised gains on investment properties was $900,000, compared with a $2.7 million increase previously.

The company lost $2 million on the sale of investment properties, $3 million on development property and $2 million in unrealised provisions against investments.

Trans Tasman made several sales: Quitting EDS House in Wellington, Airpark sites at Manukau, Qantas House and the Finance Centre in Auckland's CBD and the Air New Zealand's head office being developed in the Viaduct Harbour.

In Sydney, it sold 10 per cent of the strata title units in its office block at 65 York St.

It bought a development site at 120 Halsey St in the Viaduct and 27.2ha of development land in Christchurch from former foe John Powell.

Just before Christmas, shareholders voted to spin off three-quarters of property assets into a new London-listed entity.

Since then, four Hong Kong property developments valued at $283 million have been shunted into the new entity, Asian Growth Properties, listed in Britain but based in the British Virgin Islands.

Trans Tasman, which once owned $400 million-plus of Asian, Australian and Hong Kong property, now holds just $117 million of New Zealand and Sydney real estate.

But the company, which generates little analyst or broker interest, ended on an upbeat note: "The group is in a strong financial position to allow the completion of the current development projects. Following the restructure, the group is now clearly focused on opportunities in the New Zealand and Australian markets."