Stamford Land Corporate Ltd

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Chairman’s Message

Dear Shareholders,

Stamford Land Corporation Ltd posted a net profit after tax of $60.1 million, reflecting a 111% increase from the previous financial year. This substantial increase in profit is mainly due to the fair value gains (net of tax) of S$36.5 million compared with S$12.4 million recognised in the previous financial year's retained earnings and other reserves. Group revenue rose by 5% to $250.7 million, contributed mainly by our hotel business that was recovering healthily after the global financial crisis.

Our hotel owning and management segment's operating profits rose by 0.4% to $40.8 million. In the previous financial year, there was a one-off land lease rebate of $3.3 million. Excluding this rebate, operating profits would have increased by a sturdy 9.2%.

Revenue from hotel owning and management climbed 6.6% to $219.8 million. The higher revenue achieved was mainly due to the translation of Australian dollar revenue into Singapore dollar at higher exchange rates. Group occupancy for our stable of eight hotels increased by 3.2% to 83.6% and would have been higher if not for the closure of Stamford Plaza Brisbane for 11 weeks due to major flooding. Our hotels' revpar increased by 7.8% over the previous financial year.

With the resurgence of business confidence in Australia, our hotels were able to tap on the reviving corporate markets. It is noteworthy that despite the natural disasters in Queensland and Christchurch that affected the fourth quarter revenue of Stamford Plaza Brisbane and Stamford Plaza Auckland respectively, both hotels still performed creditably.

Operating profit for our Property Development & Investment segment increased by more than eleven fold to $10.3 million. This improvement was due to rental income from Dynon's Plaza, our office tower in Perth's Central Business District that was completed in April 2010. Revenue for Property Development & Investment segment fell by 8.7% to $26.5 million because the apartment sales at The Stamford Residences Auckland was 14 units compared with 34 units sold in the previous financial year.

The Group is in a strong financial position with cash and short-term investments totaling over $70 million and we are well poised to take advantage of investment opportunities that would augment our growth.

The Board is recommending a tax-exempt final dividend of 2.0 cents per ordinary share and special dividend of 1.0 cent per ordinary share. The total payout amounts to $25.9 million.

Stamford - A Sterling Brand

As Australasia's largest independent owner-operator of luxury hotels, we have taken great pride in building up the Stamford brand as synonymous with superior locations and accommodations as well as outstanding service.

Testifying to the distinction of our brand, Stamford Plaza Sydney Airport and Stamford Grand Adelaide clinched the winner and runner-up titles respectively in the category for Best Airport Hotels – Australia/Pacific, awarded by Skytrax World Airport Awards. This prestigious award involves a survey of 194 hotels worldwide with 860,000 hotel guests completing the Skytrax questionnaire in 2010/11. They evaluated the hotels on all key aspects including quality of accommodation, F&B outlets and staff service.

Winning these accolades would not have been possible without the unstinting efforts of our management and staff in ensuring that everything runs impeccably.

It is also noteworthy that the management and staff of Stamford Plaza Brisbane won praise from the press during the torrential Queensland flood in January this year. From managers to chefs to porters, they unhesitatingly plunged into the muddy wreckage to salvage whatever they could. Also, due to their resolute efforts, Stamford Plaza Brisbane was successfully reopened after 11 weeks of closure and stood as an inspiration to the city that was still recovering from the flood's aftermath.

We have always kept a tight watch over costs but this has never deterred us from investing wisely to reinforce our luxury brand. For instance, we refurbished The Stamford Suite of Stamford Plaza Brisbane to even greater heights of luxury. This elegant suite has accommodated royalty, heads of state and entertainment celebrities and is well poised to continue attracting the most discerning clientele. Rooms in Stamford Plaza Melbourne were all upgraded to enhance the hotel's upmarket appeal.

In the current financial year, we are undertaking a major refurbishment of the majority of rooms as well as guest elevators at Stamford Plaza Adelaide. Not resting on our laurels, the award-winning Stamford Plaza Sydney Airport will undergo facelifts of its banquet rooms, lobby and F&B outlets.

The exceptional quality of our Stamford Brand is extended to our property developments that invariably offer prestigious locations and world-class design.

The Stamford Residences & The Reynell Terraces, located in the world famous heritage precinct of The Rocks in Sydney, is about 87 % pre-sold based on number of units available and close to 70% based on value, adding up to about AUD$162.6 million as at 31 May 2011. It is slated for completion by August this year.

Our award-winning Stamford Residences in New Zealand, built on top of Stamford Plaza Auckland, is recognised for its architectural excellence and establishes an iconic presence in the city skyline. With the slow growth in the New Zealand economy, the local investment climate remained subdued and about half of the Stamford Residences apartments were sold. These 68 sold units were worth a total of NZ$56.5 million, as at 31 May 2011. We have leased out 50 units, benefiting from a strong Auckland CBD rental market that enjoys a gross yield of about 6% p.a. Continued sales efforts will be focused on targeting foreign buyers looking for quality investments but we are also prepared to hold and lease the apartments for attractive yields, especially since no new developments are expected to come on-stream in the vicinity for a considerable period of time.

We are excited about the prospects of re-developing our 22,000 square metre freehold property at North Ryde in Sydney. The proposed demolition of the current Stamford Grand North Ryde to build residential apartments is still in the early stages and plans of the redevelopment have been submitted to the authorities for approval. This will have no impact on the hotel operations for the financial year ending 2012. Meanwhile, we are looking out for an alternative hotel site to build on Stamford Grand North Ryde's existing business and goodwill.

In Perth, our Grade A Dynon's Plaza office tower is on a 10-year lease to Chevron Australia, generating a recurrent steady income stream. It had attracted an indicative offer for AUD$134.0 million but we had decided not to proceed with negotiation over certain terms. The office market in Perth is buoyant and we will continue to seek the best terms and pricing for Dynon's Plaza.

Prospects

We anticipate another positive year with demand in the hotel sector strengthening, boosted by a buoyant Australian economy and special events like the Rugby World Cup to be held in New Zealand this year. Over 70% of our hospitality revenue is derived from Australia-based customers and we expect the corporate market to grow. Although the USA, Europe and Japan markets will provide lesser contributions due to their weaker economic environments and strong Australian dollar, this would be partially off set by increasing demand from the China market.

Our Property Development and Investment segment is expected to perform well with significant gains upon the completion of The Stamford Residences and Reynell Terraces in Sydney this year.

Appreciation

I am grateful to our Board of Directors for their wise counsel and would like to take this opportunity to welcome Mr Ow Yew Heng who was appointed as Executive Director in November 2010.

To our management and staff, I would like to convey my appreciation for your dedication and diligence. Not only have you helped to further strengthen our Stamford brand and achieve good performance for the Group, your fortitude in times of difficulty such as the Queensland flood is admirable.

We are grateful to our customers for their support. Last but not least, we thank our shareholders for their confidence in us and stand ready to enhance shareholder value in every way that we can.

Ow Chio Kiat

Executive Chairman