November 15, 2008 Saturday

Wheelock takes $85m impairment loss on SC Global

By Joyce Teo

WHEELOCK Properties' losing bet on niche high-end developer SC Global Developments has left the firm with an impairment loss of $85 million.

It bought a 10 per cent stake in SC Global in June last year at $6 per share or $112.1 million then, and purchased more on the open market this year. The share price of SC Global, which has since done a two-for-one stock split, closed one cent down at 57 cents yesterday.

Wheelock's share of SC Global is now 16.05 per cent. Its chief executive, Mr David Lawrence, had in April apologised to shareholders for buying it at the top of the market last year.

For the third quarter ended Sept 30, Wheelock reported a net profit of $133 million, down 39 per cent from the three-month period ended Dec 31.

The comparison is such because the group changed its financial year end from March 31 to Dec 31.

Revenue rose 21 per cent to $229.53 million, as the firm commenced recognition of the sold units in Scotts Square. It was partially offset by lower revenue recognition from its earlier projects such as The Sea View and lower dividend income from Hotel Properties and SC Global.

The firm said its investment property, Wheelock Place, was revalued from $700 million to $790 million based on increased rental reversion.

Looking ahead, the group aims to launch the 30-unit Orchard View for sale next year.

It said that it is in a strong financial position to take advantage of opportunities which may arise as it already has $800 million cash in hand.

Earnings per share reached 11.09 cents, down from 18.18 cents at the end of last year. Net asset value per share was at $1.83, as at Sept 30, up from $1.82 at the end of last year.

Shares of Wheelock climbed two cents to close at 91.5 cents yesterday.