Updates: Stockland, Virgin, Programmed

Property developer Stockland says it's still on track to match 2010-11 earnings per share figures, despite a slow start to the current financial year.

CEO, Matthew Quinn told an investor day briefing in Queensland yesterday that soft residential sales conditions in July and August would mean residential profits would be skewed, more than usual, to the second half of the current financial year.

He confirmed guidance provided in August of a steady earnings per share (EPS) performance in 2011-12, compared to the underlying EPS of 31.6 cents in 2010-11.

"First-home buyers are the most active market segment for Stockland at present and the most likely to benefit from interest rate cuts," Mr Quinn said in an investor update presentation on Wednesday.

"It's too early to determine the benefits of this month's 25-basis-points rate cut. However, it will have further narrowed the gap between renting and purchasing."

He also said Stockland had so far purchased 60.6 million of its shares, representing 2.6%, or about half the planned buyback of 5%.

The securities were up 4.5c to $3.145c.

"Our ability to offer a diverse range of lot sizes and prices, with a particular focus on tackling affordability is now paying off, with affordable product in strong demand," Mr Quinn said.

"It's too early to determine the benefits of this month's 25 basis points rate cut, however, it will have further narrowed the gap between renting and purchasing"

He said the company had seen stronger performance in September and October.

"In Stockland's Retail portfolio, Moving Annual Turnover (MAT) performance to 30 September 2011 was stronger than the broader market and October sales continued to perform well.

"Stockland shopping centres in regional markets such as Gladstone, Nowra and Taralgon performed particularly well, as did redeveloped centres at Rockhampton and Balgowlah," he said.

"We are continuing with strategic asset sales in our office portfolio, with disposals of $625 million so far in FY12.

"The proceeds are being used to fund the buy-back and growth in our core businesses," he added.

And Virgin Australia told shareholders yesterday that it earned a first quarter profit, but refrained from giving full-year guidance because of volatile economic conditions.

Virgin's chief executive, John Borghetti, told the AGM that underlying earnings before tax in the first three months was higher than the same period last year despite higher fuel costs.

But he said he was unable to give "clear guidance due to the uncertain economic environment".

"The next 12 months will be about consolidating the changes we have implemented over the past year and starting to see the benefits," Mr Borghetti told shareholders in the meeting in Brisbane.

Virgin declined to put a figure on its profitability in the first quarter.

Virgin shares eased a third of a cent to 36.7c.

It was the second quarter a year ago that Virgin was hit by problems with its reservations system, and then it took a bigger hit from the floods of January and early February in Queensland, as well as Cyclone Yasi.

That saw the group lose $67.8 million for the June 30 year, against the $21 million profit for the 2009 year.

Programmed Maintenance Services seems to be back on track, judging by its return to profitability in the six months to September.

The company is confident the rebound from the poor first half in the 2010-11 financial year will endure and has forecast earnings growth in all of its divisions for the rest of the 2012 financial year.

Programmed, which provides staffing, maintenance and project services, told the ASX yesterday that net profit was $11.6 million for the six months to September 30, up from a $3.07 million loss in the previous corresponding period.

(The company earned $4.6 million from continuing operations and a statutory loss of $3.07 million in the September, 2010 half year).

Earnings before interest, tax and amortisation (EBITA) were $23.7 million, up from $10.3 million in the same period last year.

And the board has backed the optimism of the outlook by lifting interim dividend to 5c a share from 3c previously.

Investors liked the news and the shares closed up half a cent at $2, which wasn't bad going seeing the wider market fell for a 4th day yesterday.

That continued Programmed shares' solid performance from around mid August: they are up around 9%, while ASX 200 is down around 5%.

The company said earnings growth was strongest in its resources divisions, which benefited from increased revenue from offshore oil and gas projects.

Managing director Chris Sutherland said he expected growth in the resources division's revenue and earnings over the full year, as its major Gorgon contract (the big WA LNG project of Chevron) is due to begin offshore operations next month.

Full-year earnings in the integrated workforce division, which provides labour, were forecast to grow as result of tight control of margins and costs and cost reductions would benefit the property and infrastructure division's earnings, the CEO forecast.

"While the external business environment remains challenging and demand from some sectors has weakened. This is balanced by Programmed's increasing exposure to the resources, infrastructure and government sectors," Mr Sutherland said in the statement yesterday.

"The changes we made last year in our Property & Infrastructure division, in particular our Property Services business, have improved our margins. While some of the division's private sector customers remain cautious, we are seeing increasing opportunities in the government sector.

"With more than 7,000 customers and 100 branches throughout Australia and New Zealand, Programmed is well placed to continue to expand our operations and increase the range of services we provide to each customer," said Mr Sutherland.

"While the external business environment remains challenging and demand from some sectors has weakened, this is balanced by Programmed's increasing exposure to the resources, infrastructure and government sectors.

"Overall, the group continues to project for FY2012 growth in the Property & Infrastructure division's earnings supported by the cost reductions in FY2011; growth in the Resources division's revenue and earnings due to strong demand; and growth in the Integrated Workforce division's earnings as a result of tight control of margins and costs," Mr Sutherland said.