Stockland UK business to break even after writedowns09:45,...

Stockland UK business to break even after writedowns
09:45, Friday, 3 October 2008

Sydney - Thursday - October 2: (RWE Australian Business News) -
Stockland (ASX:SGP) has reviewed the profit forecast for its UK business
and the carrying value of its UK assets in light of the recent rapid
deterioration in the UK economy and property market.
The UK business is now anticipated to achieve a break-even 2009
year operating result.
UK inventory writedowns are expected in the order of $50m after
tax and a goodwill impairment charge in the order of $60m in the group's
first-half results.
The UK operation makes up less than 5pc of Stockland's asset
base.
Managing director Mr Matthew Quinn said: "Conditions in the UK
have significantly deteriorated over the past two months with a sharp
fall in confidence, economic conditions and property values. It is now
widely predicted that the UK is heading for a recession.
"Accordingly, we have reviewed the FY09 UK business plan and
profit forecast and the carrying value of our UK property assets."

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On group outlook Mr Quinn said, "Recent events in global capital
markets are quite unprecedented and the full impact is yet to unfold.
"The Australian economy is in a somewhat advantageous position
due to its strong fiscal position, robust banking sector and the
potential for significant decreases in interest rates to counter any
slowdown in economic activity.
"Our Australian Residential and Commercial Property businesses
are performing broadly in line with expectations.
"The UK operating profit was originally forecast to be $20m in
FY09 and we now expect a break-even position.
"This shortfall from the UK is expected to be offset by upside
from our Retirement Living business and savings in group overheads.
"We therefore remain on track to achieve our guidance of nominal
EPS growth in FY09 before allowing for the writedown in UK asset values.
"However, we remain cautious about global economic and property
market conditions and in making this guidance we are assuming that there
is no further material deterioration during the rest of the year."