About Stockland

What we do

We have a long and proud history of creating places that meet the needs of our customers and communities.

Ervin Graf founded Stockland in 1952 with the vision to "not merely achieve growth and profits but to make a worthwhile contribution to the development of our cities and great country."

Pursuing that vision has seen us grow to become one of Australia’s leading listed diversified property groups - developing and managing a large portfolio of residential community, retirement living, retail, office and industrial assets.

Commercial Property

Retail

We are one of the largest retail property owners, managers and developers in Australia. Our portfolio comprises 42 retail centres valued at approximately $4.6 billion. We accommodate more than 2,600 tenants, generating over $5.2 billion in retail sales.

Office

Our office portfolio is comprised of 28 properties valued at $2.5 billion. We are focused on maximising investment returns across the portfolio.

Industrial

Our industrial portfolio is valued at $1.0 billion, with 15 properties strategically positioned in key locations for logistics, infrastructure and employment.

Residential

Communities

We are a leading residential developer in Australia, focused on delivering a range of masterplanned and mixed-use communities in growth area across the country. We have 90,200 lots and projects with an estimated total end value of approximately $24.2 billion.

Apartments

In June 2009 we announced that we will trade-out of our existing apartments projects. We have a range of quality apartment projects in high profile locations across Australia, with an estimated remaining end market value of approximately $0.5 billion.

Retirement Living

We are a Top 3 retirement living operator within Australia, with 7,535 established units across five states. Our portfolio includes a short-medium term development pipeline of over 3,413 units.

Stockland UK

Our UK business has a portfolio spanning retail, office and mixed-use projects. In August 2009 we announced an orderly withdrawal from the UK market, and we will sell assets over the next two to three years.

Our strategy

We are focused on leveraging our diversified business model to deliver growth via our 3-R strategy: Residential, Retirement Living and Retail.

In our Residential business we are focused on our market-leading position by increasing our footprint in higher population and employment growth areas. We are increasingly using feedback from our customer  insights research to develop quality products and respond to the needs of  our customers.

Our Retirement Living business will capitalise and serve the needs of older Australians. We have a substantial development pipeline and there are acquisition and consolidation opportunities. Our aim to double the size of the business was realised with the acquisition of Aevum in late 2010.

In Retail we will continue to develop the business by enhancing the existing retail assets to improve their quality and position in the market. In delivering our 3-R strategy we achieve competitive advantage through our customers, products and communities.

These focus areas are discussed in detail through this report in our work on customer engagement, housing affordability and community development. It is also through these focus areas that our social and environmental sustainability goals are embedded into our group strategy.

Our value chain

We own, manage and develop property and operate across most parts of the property value chain. However, we engage others to carry out building works, deliver services such as security and cleaning and provide audit and consultancy advice.

Our primary areas of direct activity

• Owner
• Asset and property manager
• Developer

Our areas of influence

• Fund manager
• Design
• Builder (principal contractor)
• Commercial Office Leasing
• Upstream products, including building materials
• Downstream services, including cleaning and security

Where we operate

Governance

The Board takes its governance responsibilities seriously and believes it has the necessary mix of experience and skills to oversee the high standards of corporate governance, integrity and accountability required of a professional and ethical organisation. Details of our corporate governance policies and practices are outlined in our Financial Report 2011.

 

The Board believes that Stockland's governance accords fully with the principles and recommendations of the ASX Corporate Governance Council. Our key policies and the charters for Board Committees can be found on our website.

 

 

Risk management

Risk management involves continuously identifying, evaluating, and monitoring exposures across the organisation. Risks can be managed by introducing policies, procedures and work practices. We believe, however, that sustained risk management requires a risk-aware culture where risk management is embedded into the daily management and operation of our organisation.

In FY11, we strengthened our focus on risk management at the Board level by creating a new Risk Committee to monitor risks across our business and our financial operations. The Risk Committee's charter encompasses a review of risk management issues previously the responsibility of the Treasury Committee (including funding, liquidity, interest rate and counter-party risks), the CR&S Committee (health and safety risks) and project and operational risks.?

In FY11 we strengthened Group Risk's capabilities and deepened risk management culture by facilitating a series of Risk Masterclass sessions to business leaders across the organisation. We believe we can further improve our culture of risk awareness through sharing best practice and risk management expectations with middle management.

Group Risk also facilitated an increased organisational risk focus by actively supporting the identification of material risks to business operations and developing key financial metrics for use in investment decisions.

During the year we have increased the visibility of our existing Fraud and Whistleblowing policies by creating a module for inclusion within our mandatory compliance training. In addition, a Fraud workshop was conducted for key teams in the organisation. We have introduced an anonymous "Tell Me" function on our Intranet encouraging employees to speak up on suspected fraudulent or corrupt practices.

Over the past 12 months, our Group Risk and Sustainability teams have actively collaborated to consider the impact of non-financial risks to inform strategic decisions.

In FY12, the Group Risk and Sustainability teams will continue to work closely together to further embed risk awareness of non-financial risks across the organisation.

Underlying profit

We achieved an 8.7 per cent increase in Underlying Profit. This reflects the profit we realise through our daily business operations. The result is underpinned by growth in each of our three core businesses and a particularly strong performance from Residential Communities. 

 

 

 

 

Underlying earnings per security

Our underlying earnings per security was 31.6 cents, up 8.6 per cent on last year.

 

 

 

 

 

Dividend and distribution per security

Total distributions for the year were 23.7 cents per security, which represents a total payout of $564.8million. The Board's policy is to pay to securityholders the greater of 75 per cent of Underlying Profit or Trust Taxable Income.

 

 

 

  

Balance sheet

We maintained a conservative balance sheet with gearing below our target range of 25 to 35 per cent, but up from 18 per cent last year. This gearing level is conservative given the challenges faced by global financial markets, but also allows us to move quickly if growth opportunities arise.

 

 

 

Composition of underlying profit

'Underlying Profit reflects Statutory Profit adjusted to reflect the Directors' assessment of the result for the ongoing business activities of Stockland, in accordance with the AICD/Finsia principles for reporting Underlying Profit.