Henderson Land turns positive after 26pc profit gain

Henderson Land Development posted a better-than-expected 26 per cent gain in underlying profit to HK$8.94 billion for last year as contributions from property sales and rental income increased.

Chairman Lee Shau-kee said that with its sizeable land bank, the company would maintain strong growth momentum in coming years.

In Hong Kong, properties under development by Henderson amount to 13.7 million square feet. Including about 800,000 sqft of major completed stock, the total attributable gross floor area is about 14.5 million sqft.

"Upon successive completion of these projects, assuming sale can be achieved at HK$10,000 per square foot, together with the completed stock, there would be an accumulative total sales value of HK$145 billion," Lee said in the company's results announcement.

That would serve as an important pillar to support the group's revenue growth in coming years, he said.

The positive note was sounded despite a softening of the housing market in the city. A Centaline Property Agency index that tracks second-hand home prices at 100 housing estates dropped 0.7 per cent week on week to 117.18 last week, extending the year-to-date losses to 1.6 per cent.

The company's net profit, which included the fair-value change of investment properties, fell 21 per cent to HK$15.95 billion last year from 2012.

Henderson proposed a bonus issue of one new share for every 10 held. Directors announced a final dividend of 74 HK cents per share, bringing the full-year payout to HK$1.06 per share, unchanged from the year before.

Revenue from property sales surged 91 per cent to HK$17.1 billion, while pre-tax net rental income jumped 14 per cent to HK$5.6 billion.

The increase in revenue contribution from property sales in Hong Kong was mainly attributable to the sale of units at the Double Cove phase one development in Wu Kai Sha and The Reach in Yuen Long.

The group also sold or pre-sold an attributable HK$7.31 billion worth of mainland properties last year, up 12 per cent from the previous year.

Meanwhile, subsidiary Henderson Investment said net profit dropped 60 per cent to HK$10 million last year.

The decline was attributed to the provisional suspension of the payment of toll fees on the Hangzhou Qianjiang Third Bridge in Zhejiang to a joint venture involving Henderson Investment from March 2012.

Directors declared a final dividend of two HK cents per share, bringing the full-year total to four HK cents per share.

Shares in Henderson Land shed 1.8 per cent to HK$40.70 yesterday while Henderson Investment lost 1.6 per cent to 61 HK cents.