Centro Retail Australia says it will look to acquire up to $1.2 billion worth of properties from its embattled syndicate business over the next three years after revealing an inaugural full-year loss of $228.4 million.
Dragging down the company’s result was a $85.6m payment to settle a long-running class action litigation and the $203.3m provision to current Centro shareholders exposed to the litigation.
The net loss belied a relatively solid operating performance that saw underlying earnings for the seven months after the company relisted on the stock exchange in December 2011 come in at $123.4 million.
Shareholders will receive a dividend payment of 6.5 cents per security after the company recorded comparable net operating income growth of 3.5 per cent, their first payout in four years.
Centro chief executive Steven Sewell, who joined the company in January and has been charged with its post-restructure transformation, said that he was delighted with the result, which was ahead of forecasts.
Looking ahead, Mr Sewell said the company forecasted full-year 2013 underlying earnings of between 15.3 cents and 15.6 cents per security, barring any unforeseen events.
With its transformation nearly half complete, Centro will now look to drastically downsize its $2.4bn syndicate business as long-suffering investors seek to redeem their investments.
Centro MCS, a division of the company that manages its investments in 23 property syndicates, could be halved as the company moves to acquire as much as $1.2bn worth of shopping centres of held by separate syndicate funds that were not being rolled over by investors, Mr Sewell said.
“It’s not a wind-up of the business,” Mr Sewell told analysts following the announcement. Mr Sewell said that the company had the obligation to acquire some of the assets as investors chose not to seek another term.
Mr Sewell also confirmed that all references to Centro on its centres would be removed in the years ahead as the company looked to put its chequered past behind it.
But a key part of the Centro transformation – an investment grade rating - would take a least one more year to come through, Mr Sewell said.
Centro Retail Australia was formed out of the $3 billion restructure of the near-insolvent Centro Properties Group and the somewhat healthier Centro Retail Group in December last year.
The results mark the first time in four years that long-suffering shareholders in the former Centro Retail have received a dividend payout.
The past eight months has seen Centro facing a number of legacy issues from the restructure that have drawn attention away from the company’s operating performance.
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