UBS: WDC Westfield Group Buy 1 Recommendation: Records Net Profit of $4.2b

Submitted by Share Trading on 20 February, 2006 - 12:32

UBS has a Buy 1 Recommendation on [WDC] Westfield Group with a target of $19.04. The future growth of Wesfield lies with redeveloping their shopping centres and has handed down a $4.2 billion annual net profit. This 2005 result was boosted hugely by property revaluations that are now counted under the new international financial reporting standards, in the first annual result since Westfield merged its property trusts with their managing company in mid-2004. Under previous accounting standards, Westfield's annual profit would have been $1.66 billion, in line with guidance and market expectations.

Westfield's earnings in 2005 were helpedby rent increases at its 128 centres, with comparable net income growing 5.3 per cent in Australia and New Zealand, 3.6 per cent in the United States and 6.6 per cent in the United Kingdom. The Westfield Group [WDC] also acquired $1.5 billion worth of new shopping centres during the year and benefited from $3.2 billion in property revaluations, with the total value of all its centres now $52.5 billion. Distributions will not be increasing this year having previously been paying out more money than Westfield actually made in profit. Westfield will now limit distributions to 100 per cent of its operational segment earnings. Distributions for 2006 are now forecast to be 106.5 cents per stapled security - virtually the same as the 106.57 cents announced for 2005.

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