Property manager and developer Australand, coming off a huge headline loss due to the economic crisis, is confident the worst is behind it. But it expects real growth will not get under way until next year.

The company reported a formal loss of $298.2 million for the 2009 calendar year, reflecting the impact of extraordinary items totalling almost $420 million. These included revaluation losses on investment properties of $249.4 million, impairment of development and joint venture assets of $148.4 million, and non-recurring finance costs of $20.7 million.

Operating profit was $120.2 million, down 31 per cent on the previous year. The managing director, Bob Johnston, said profit would be similar this year. ''Investment property valuations are at, or near, trough levels in the cycle. We expect investment property earnings to grow steadily, primarily from embedded rental growth,'' he said.

''With the improved outlook and economic conditions … development activity in the commercial and industrial division will strengthen … leading to growth in 2011.''

Mr Johnston said the residential division would be steady, with strong growth in Melbourne and Perth. Second- and third-home buyers would take up the slack from an expected softening in first-home buyer demand. New residential projects would start this year, leading to an improved performance next year.

The group will continue to distribute 80 to 90 per cent of trust income. No dividend will be paid this year from corporate earnings but distributions this year are expected to be 4.1c per stapled security.

Australand will seek shareholder approval at the annual meeting in April for a five to one consolidation of the group's stapled securities. Mr Johnston said following a strategic review, Australand aimed to generate 60 to 70 per cent of group earnings before interest and tax from recurrent earnings. Underperforming capital in the development divisions would be recycled, and gearing would be kept within a range of 25-35 per cent, he said.

All going well, increased weighting to investment property would improve access to capital.

Australand's revenue last year fell by $145 million, or 17 per cent, to $686.76 million. The final dividend of 2c, paid on Monday, gave a total year dividend of 5c.

Source: Sydney Morning Herald