Although Australia escaped the worst of the effects of the global financial crisis, the past year was one of considerable uncertainty and the housing sector was no exception. Despite these troubled economic circumstances, Landcom was able to produce a net after tax operating profit of $33.2 million which was marginally better than forecast in our Statement of Corporate Intent. This enabled the Corporation to return to the Government $58.2 million by way of dividends and tax equivalent payments.
 

This was no small achievement and was attributable in part to the Corporation’s capacity to respond quickly to the Federal and State Governments’ funding initiatives and other incentives designed to create jobs and stimulate economic activity.

Landcom’s response to these initiatives was to bring into the market place first home buyers’ product to meet burgeoning demand and to work collaboratively with other Government agencies to deliver social housing and infrastructure. At the same time the Corporation intensified its work program on a number of its landmark projects at a time when much of the industry was forced to severely scale back activity.

Landcom has also played an important part in helping the State Government to deliver the targets contained in the Commonwealth’s stimulus package – particularly in relation to first home buyers and social housing. Generous grants and historically low interest rates encouraged first home buyers back into the market in increasing numbers and this helped to underpin a remarkable improvement in our land sales revenue particularly in the second half of the year.

The achievement of our financial targets has again demonstrated Landcom’s adaptability and agility to meet changing and challenging circumstances and we make no secret of the fact that we believe Landcom’s true value to Government lies in our ability to build strong relationships, solve problems with a “can do” attitude and to drive sustainable solutions across our projects. That these attributes have been given recognition during the year is most pleasing and the Managing Director comments on this in more detail in his report.

Over the coming year, we will continue to work with other agencies to help deliver the Government’s nation-building and economic stimulus package. In an environment in which our private sector partners face considerable capital constraints, we will need to be even more flexible in our arrangements with them to ensure their continued interest and involvement in our projects.

Importantly, our business model must adapt and change in response to economic conditions which, we believe, will continue to be quite difficult into the medium term. In this way, we intend to remain a catalyst for investment and thus help to shore up confidence in the property sector.

In the short term we expect that the property market will remain subdued and this brings with it a growing imbalance in housing supply and demand; presently only about half of underlying housing demand is being met.

Any rise in unemployment could further dampen demand temporarily, but over the medium term, given the anticipated population growth, a sharp recovery in urban infill developments may well be expected. If this eventuates, there will be a need for a substantial supply of “brownfield” sites to be identified and amalgamated well in advance. This is an appropriate role for the Corporation and one which we will tackle energetically.

In preparing this overview, I have been reminded of the extent and reach of Landcom’s work, the sustainable solutions that have maintained its industry leadership and the broad spread of the corporation’s projects and I am acutely conscious of just how much has been achieved.

In addition to its adept handling of the new and challenging situations that inevitably arise each year, Landcom achieves its long-term goals by identifying and embracing clear strategies and measurable targets to be delivered over the short to medium term. It is, of course, the staff of Landcom to whom most of the credit is due for the Corporation’s achievements.

The Board extends to the staff, the senior management team and to the Managing Director, Mr Sean O’Toole, special thanks for a splendid performance in what has been a most challenging year.

The Board also extends a warm welcome to new Director Ms Kim Cull who joined the Board this year. Besides her legal expertise, Kim has extensive private and public sector experience.

My personal thanks go to my fellow directors who always engage in welcome and robust debate and who give so generously of their wise counsel; they make my job a most enjoyable one.

William Kirkby-Jones AM
Chairman