Stockland said on Friday it expects to maintain earlier guidance of "nominal" growth in earnings per share (eps) in 2009, but this was before taking into account a $50 million asset write down and a $60 million first half impairment charge on its UK business.
Stockland said it now expected its UK business to break even in fiscal 2009, down from earlier guidance of a $20 million operating profit.
Stockland says its UK business makes up "less than five per cent" of the group's asset base.
"Conditions in the UK have significantly deteriorated over the past two months with a sharp fall in confidence, economic conditions and property values," Stockland managing director Matthew Quinn said in a statement on Friday.
"It is now widely predicted that the UK is heading for a recession.
"Accordingly, we have reviewed the fiscal 2009 UK business plan and profit forecast and the carrying value of our UK property assets."
As a result of this review, Quinn said, the UK business now was "anticipated to achieve a break-even fiscal 2009 operating result.
"It is expected that there will be UK inventory write-downs in the order of $50 million after tax and a goodwill impairment charge in the order of $60 million in the Group's first half results."
While Stockland confirmed its overall guidance, of "nominal" eps growth in the period, Quinn said this was before allowing for the UK write down.
"The UK Operating Profit was originally forecast to be $20 million in fiscal 2009 and we now expect a break even position," Quinn said.
"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 write-down in UK asset values."
