Today's Announcement is significant because it increases the...

Today's Announcement is significant because it increases the likelihood of Vue Tower being completed, thus increasing the spate of settlements expected in FY19. The graph on page 49 of the FY18 Annual Results, suggests that there is about $100 million of presold stock in Reva and Vue Tower, so a good chunk of that should give the revenue and profit recognition a fillip. The Annopuncement reads, in part:

“The Company is trading in a more favourable environment than it has been for the past five years,” Finbar Managing Director Darren Pateman said. “We have no debt on completed stock, and are expecting a strong flow of settlements in the coming months through the recent completion of Reva and expected completion of Vue
Tower.”

The buy-back tells me that FRI have enough on their plate for the near- and mid-term future, and the commercial artfulness not to attempt more new ventures for a while. With management diverts cashflow into either dividend payments or buy-backs is a matter on which I am ambivalent. I think management will lift the dividend, but also spend on buy-backs, if the shares remain undervalued. In spite of this, management could be tempted to invest in a development property if a suitable one comes up at an exceptionally low price.