Wheelock Properties

Wheelock's nine-month HK$3.36b return beats previous year

PUBLISHED : Thursday, 27 March, 2008, 12:00am
UPDATED : Thursday, 27 March, 2008, 12:00am

Investment and property holding company Wheelock reported an underlying profit of HK$3.36 billion for the nine months to December last year, compared with HK$3 billion for the 12 months to March in the previous financial year.

The group has changed its financial year-end from March to December to be consistent with Wharf, which became a subsidiary in August after Wheelock raised its stake to more than 50 per cent. Year-on-year comparative figures were not available.

Net profit including HK$10.88 billion in revaluation gains from investment properties was HK$7.62 billion, compared with HK$6.31 billion in the previous financial year. The firm declared a final dividend of 10 HK cents per share, the same as a year before.

'The bottom line is largely ahead of our expectation even though ours is the highest among estimates,' said Eric Wong, joint head of Asia property research at UBS. He expects Wheelock to continue benefiting from Wharf's performance.

Wharf contributed a net profit of HK$2.86 billion to Wheelock during the period, accounting for 85.2 per cent of the parent's profit before revaluation gains on investment properties.

Singapore-listed Wheelock Properties (Singapore), in which Wheelock has 76 per cent stake, contributed a profit of HK$321 million. Profit from Wheelock's own operations only amount to HK$176 million.

'I believe Wharf can benefit from duplicating its successful development model for Times Square and Harbour City in Hong Kong at its latest development on the mainland,' Mr Wong said.

He believed Wharf's shopping centres would be welcomed by mainlanders, as in Hong Kong, and the serviced flats would sell at high prices, helping raise Wheelock's bottom line.

Nevertheless, Wharf's rapid expansion on the mainland entails a large capital and may be a heavy drain on cash flow, affecting Wheelock's performance at a result, according to one analyst,

Wheelock shares closed yesterday at HK$21.80, a gain of 6.86 per cent.