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PROFITABILITY
Purpose
Landcom’s objective is to operate as a successful corporate entity with at least the same level of efficiency as any comparable private sector company. Indicators 16 to 21 provide a measure of Landcom’s profitability.
Target
Landcom aims to operate as a successful business and maximise the net worth of the State’s investment in its operations.
Results
| DESCRIPTION | 2005/2006 | 2004/2005 | 2003/2004 | 2002/2003 |
|---|---|---|---|---|
| Sales revenue | $317,276,000 | $326,939,000 | $333,253,723 | $281,222,000 |
| Sales margin | 38.9% | 45% | 48.8% | 51.2% |
| Return on sales | 14% | 19.2% | 26.3% | 29.5% |
| EBIT | $72,610,000 | $99,315,000 | $132,180,000 | $127,130,000 |
| Return on equity | 12.3% | 17.2% | 24.6% | 26.1% |
| Return on total operating assets | 6.4% | 8.4% | 15.1% | 16.5% |
FINANCING CAPACITY
Purpose
This indicator provides a comparison between Landcom’s external financing arrangements and capital provided through the State Government’s shareholder equity, and profits retained from previous years. Landcom’s maximum debt levels are established through periodic capital structure reviews undertaken by Landcom and the NSW Treasury.
Target
Landcom aims to provide a responsible balance between its net debt and total equity.
Results
| DESCRIPTION | 2005/2006 | 2004/2005 | 2003/2004 | 2002/2003 |
|---|---|---|---|---|
| Debt to equity ratio | 18.3% | 23.6% | 4.1% | 3% |
RETURNS TO GOVERNMENT
Purpose
This indicator measures Landcom’s annual returns to the State Government.
Target
Landcom’s objective is to provide an appropriate return to the State Government.
In 2005/2006, this represented 100% of Landcom’s net profit.
Landcom pays an income tax equivalent to Government. The tax rate is currently set at 30% of net profit. Landcom also pays all other NSW charges and taxes imposed on private sector organisations, including stamp duty and land tax. These funds are available to the NSW Government to finance operations and capital works.
Results
| DESCRIPTION | 2005/2006 | 2004/2005 | 2003/2004 | 2002/2003 |
|---|---|---|---|---|
| Returns to Government | $61,738,000 | $73,518,000 | $87,978,000 | $83,081,000 |
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JOB CREATION AND ECONOMIC OUTPUT
Purpose
This indicator measures the economic output and employment generated from our activities.
Target
There is no specific target other than to demonstrate tangible ways of how we contribute to the economy of NSW.
Results
| DESCRIPTION | 2005/2006 | 2004/2005 | 2003/2004 | 2002/2003 |
|---|---|---|---|---|
| Total number of jobs created through Landcom’s activities | 6,050 | 7,868 | 5,270 | 4,470 |
| Total economic output generated from Landcom’s activities | $474,195,644 | $616,675,900 | $413,026,700 | $350,351,900 |
Jobs and economic output are generated within the development and associated industries as a product of Landcom’s activities. Accordingly, the following multiplier formulas are used to calculate employment and economic output generated as a function of Landcom’s capital investment: the Australian Bureau of Statistics summarises the multipliers for output and employment in the construction industry. They show that for every 1 million dollars spent on construction output (houses, non-residential buildings etc) in 1996/1997, a possible $2.9million in output would be generated in the economy as a whole, giving rise to 9 jobs in the construction industry (the initial employment effect), and 37 jobs in the economy as a whole from all effects.