(Corrects typos in 4th last graf)
SYDNEY, Aug 18 (Reuters) - Australia’s No. 2 property group Stockland Corp Ltd on Monday posted a 12 percent rise in underlying net profit thanks to positive residential market conditions but said earnings growth will slow as broader economic sentiment remains cautious.
Earnings came in at A$555 million ($517 million) for the year ended June 30, up from A$495 million a year ago. Revenue rose 11.5 percent to A$1.92 billion and underlying earnings per security rose 7.1 percent.
The company’s residential property division grew pre-tax profit by 57 percent to A$95 million and was “the key incremental driver,” Stockland chief executive officer Mark Steinert told Reuters in a telephone interview.
Residential profit growth was driven by new projects in Sydney and Perth plus “stronger overall market conditions”, Steinert added.
But the company said that while global economic growth has improved in the past year, it is unlikely to return to long-term trends in the near term and in Australia “businesses and consumers remain cautious”.
The company said it expects to grow earnings per share by between six percent and 7.5 percent in 2015, assuming no material change to market conditions.
It also will consider making acquisitions, Steinert said, after booking an A$80 million profit on the sale of its 19 percent stake in smaller rival Australand Property Group to Singapore-listed property giant Frasers Centerpoint Ltd early in the 2015 financial year.
“In particular, we will accelerate our expansion into medium density residential and mixed use development, grow our logistics and business parks capabilities, invest in community and our people and accelerate planned system and process enhancements.”
The company said total distributions for the year were A$0.24 and it expected to maintain that distribution in 2015.
Stockland securities closed at A$4.14 on Friday, having risen 12.5 percent since March 27.
1 US dollar = 1.0735 Australian dollar Reporting by Byron Kaye; Editing by Richard Pullin and Michael Perry