As Peet Limited approaches its second year as a listed company, the move to join the Australian Stock Exchange has coincided with a buoyant market.
As Peet Limited approaches its second year as a listed company, the move to join the Australian Stock Exchange has coincided with a buoyant market.
This year, the company has increased profit forecasts after a doubling of its share price in less than 12 months.
Peet’s management claims its recent success is built on a diversification strategy, with the listed asset and funds management, property syndication and development company casting its net Australia wide for opportunities to enlarge its land holdings, create more capital raising syndicates and grow its income property fund.
The former Peet & Company recently changed its name and logo for the first time in 25 years in an effort to sharpen its image.
Established in 1895, the Western Australian-based company is now the third largest of Australia’s listed landholding companies, after Delfin Lend Lease and Stockland.
Peet’s business of developing residential estates is expected to pay off once a further 34,800 lots, worth $4.2 billion, are subdivided and sold across 55 of its land development projects in WA, Victoria, New South Wales and Queensland.
Peet Ltd managing director Warwick Hemsley told WA Business News the company had dedicated a lot of time and resources into making acquisitions in Victoria and Queensland. As a result, more than half of its business was now located outside of WA.
“We’re very focused on taking Peet from a WA company to a national company and we’re well on track to do that,” he said.
“Being diversified over several states acts as a cushion to changes in any particular market, assuming they don’t all move in synchronisation.”
Mr Hemsley said that, while the WA property market was still strong, Peet’s interests would not be significantly affected in the event of a cooling-off period.
The company recently increased its net profit forecast for the 2006 financial year by 5 per cent, to $36.4 million, representing a 15 per cent jump in profits on the past financial year.
Since listing on the Australian Stock Exchange in August 2004, Peet shares have steadily climbed to just more than $4 a share this week, more than doubling in value in nine months.
Mr Hemsley said Peet’s land holdings would provide the company with ongoing streams of activity for at least a further 10 to 12 years.
Peet has already identified a number of sites within its existing ‘land bank’ to develop retirement housing, and is soon to announce its first development.
Other plans include the development of medical centres, child-care facilities and industrial premises.
Further diversification into commercial and retail includes a number of shopping centres in the planning and development approval stages.
“It’s an area we’re working on getting involved in…we’ve got projects in Melbourne’s west and have a site we’re developing North of Perth,” Mr Hemsley said.
Peet’s recent move to appoint former Foodland head of property acquisition, Graham Allen, to the position of commercial development manager WA was a reflection of the importance to the company of building a retail portfolio.
Further residential syndications in WA are on the cards following the company’s successful $8.5 million raising in June to purchase a 19.7 hectare land parcel in Byford.
In the same month, the Peet Cranbourne Central Syndicate closed oversubscribed after raising $20 million to buy land for future subdivision into 706 lots, south-east of Melbourne.
After 21 years at Peet, 14 years of those as managing director, Mr Hemsley said he was still comfortable in his role and there were no plans to move.
“Chairman Tony Lennon and I have been involved for the same period of time and we’ve both immersed ourselves in this business; I’d like to think we’d always stay in Western Australia,” he said.
