Sydney, Dec 5, 2005 AEST (ABN Newswire) - Property and funds management group Cromwell Corporation Limited (ASX: CMW) announced today it expects to report pre-tax earnings for the six months to December 31, 2005, of approximately AUD$4 million.
For the full year to June 30, 2005, Cromwell reported pre-tax earnings of AUD$3.7 million.
Cromwell Executive Chairman Paul Weightman said the increase in expected profits would be achieved on the back of fees earned from a number of acquisitions by the Cromwell-managed Cromwell Diversified Property Trust (CDPT).
To date the Trust has contracted to acquire assets valued in excess of AUD$270 million during the half year.
Assets acquired include the AUD$88 million Australian Wheat Board building at 380 La Trobe Street, Melbourne, which was announced today and the Bundall Corporate Centre on the Gold Coast at a price of AUD$52.86 million.
"Continuing increases in recurring income from new and existing assets under management also contributed to the increase in profitability," Mr Weightman said.
"There are also a number of other possible asset acquisitions in early stages of discussion or due diligence, and it is possible, although unlikely, that further assets could be acquired prior to the end of the half-year.
"Based on funds raised to date for the CDPT, these further acquisitions could increase the half year result."
Detailed guidance on the full-year profit for 2006 is unable to be given at this stage, as it will to a large extent depend on the timing and value of assets identified for acquisition by Cromwell during the second half of the year.
More detailed guidance will be given as assets are identified, however at this stage it is apparent that if sufficient quality assets are able to be acquired, the full-year result is expected to be significantly higher than 2005.
Cromwell has contracted to acquire a vacant industrial property at 200 Holt Street, Eagle Farm, for AUD$4.78 million which recently became unconditional. The property is adjacent to the CDPT-owned NQX Distribution Centre.
Mr Weightman said Cromwell was exploring a number of options for leasing and/or further development of the property which is expected to contribute to profit in the 2006 or 2007 financial years.
"The recent joint venture agreement announced in relation to the land surrounding the Bundall Corporate Centre on the Gold Coast is also expected to contribute to profits in future years," Mr Weightman said.
There are also a number of non-operational factors, predominantly related to the introduction of AIFRS, which may affect the result for the half-year.
These include: - a possible upward revaluation of the interest held in the Cromwell Mary Street Planned Investment, originally acquired for $1.52 Million; - changes in the value and amortisation of intangible assets (not expected to have a material impact); - the possible recognition of an expense related to the employee share plan (not expected to have a material impact); and - recognition of a deferred tax asset in relation to part or all of the income tax losses available to the group.