James Packer loses $5.6m as Queensland property developer slashes profit forecast

Gold Coast property developer Sunland Group has shocked the market by slashing its profit forecast, cutting dividends and writing down the value of its assets as the property sector conditions continue to worsen.

Gold Coast property developer Sunland Group has shocked the market by slashing its profit forecast, cutting dividends and writing down the value of its assets as the property sector conditions continue to worsen.

The announcement resulted in a 20% fall in Sunland’s share price, which is another blow to the company’s investors, including gaming magnate James Packer, who owns around 11% of the company. The value of his stake fell $5.6 million yesterday and has plummeted from $168 million at the start of 2008 to just $22 million.

Sunland now expects profit for 2008-09 will be $74 million, compared with a forecast of $109 million given at the company’s annual general meeting in November and confirmed in late December.

But managing director Sahba Abedian says that Sunland has decided to write down the value of the company’s Australian assets by $22.3 million “in view of the current global crisis”.

“The provisions demonstrate our commitment to our capital management program and recognise extended selling periods are being experienced in the residential property sector,” Abedian told investors in a statement to the Australian Stock Exchange.

Sunland is having particular problems in New South Wales, where property sector confidence has hit rock bottom. Abedian says the company will concentrate on the Queensland and Victorian markets.

Sunland also says its dividend is likely to fall from 7.5c to 3c for the financial year, although a final decision on this will be made closer to the release of the company’s full-year results.

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