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LANDCOM MET OR EXCEEDED ALL OF ITS FINANCIAL TARGETS, DESPITE THE PROLONGED AND SEVERE DOWNTURN EXPERIENCED BY THE HOUSING SECTOR DURING THE YEAR.
It is commendable that in such testing market conditions the Corporation was able to slightly outperform its sales revenue and gross margin budgets. Net profit after tax was $44.3 million against a budget of $38.7 million and earnings before interest and tax (EBIT) were $72.6 million compared to a budget of $71.4 million. In total, Landcom returned to the Government the sum of $61.7 million.
During the year, Landcom continued its leadership in the implementation of sustainable development principles. There is now a well established culture throughout the Corporation which embraces and promotes the values of economic, environmental and social sustainability in all of the projects that Landcom undertakes.
Not all of the sustainability targets were met, but the very monitoring of performance enables us to learn what barriers exist and what difficulties confront our people in their drive to achieve their sustainability targets. These experiences then challenge Landcom to find alternative ways and means of achieving the longer-term sustainability goals that the Corporation has set for itself.
During the year, the New South Wales Treasury undertook a wide-ranging review of Landcom’s operations; it was the third such review in the last ten years. The Board and Senior Management used the review as an opportunity to refine the Corporation’s portfolio of projects to ensure that they focus on the strategic and complex developments that are closely aligned to the Government’s urban management agenda.
The review was seen by the Board to be a helpful exercise and it confirmed Landcom’s position as a valuable Government business enterprise.
The year ahead is likely to be equally as challenging as the one just ended, although there are tentative signs of a very modest recovery in the housing sector. That the market will recover is beyond question and when it does, Landcom must be in a sound position to quickly produce products to meet the improved market demand. For this reason, much effort will be directed towards planning and designing new products and achieving development application approvals, together with “tender-ready” engineering and civil works documentation.
Landcom’s achievements are nothing more than the collective measure of its people. They have performed particularly well in a difficult and increasingly complex market environment. The Board of Directors is most appreciative of their efforts and pays tribute to their skill and dedication.
It is, of course, the Managing Director who is responsible for the leadership of the organisation and for providing and fostering the achievement of the Corporation’s vision. Mr O’Toole has again led the Corporation with distinction and we are delighted to announce that he has accepted the Board’s invitation to renew his contract for a further term of three years.
After ten years of service, Ms Penny Morris AM resigned from Landcom’s Board in order to accept an appointment to the Board of the Mirvac Group. The Board acknowledges with gratitude the outstanding contribution that Penny Morris has made to the growth and well-being of Landcom and we wish her well in her new role.
Last, I thank my fellow Directors for their support, encouragement and good humour. They provide lively debate and wise counsel and they make my job most enjoyable indeed.
\WILLIAM KIRKBY-JONES AM
CHAIRMAN
