Redcape posts $34.6m profit
A RUSH of hotel sales has allowed Redcape Property Fund to post a $34.6 million net profit for the six months to December 31.
This was a welcome increase on the corresponding period in 2008 when the company, then called Hedley Leisure and Gaming, reported a $174 million loss.
From June to December, Redcape, sold 11 properties and cut debt from $740.8 million to $650 million, albeit still a vast amount.
Among the properties sold were pubs such as the historic Barrier Reef Hotel in Cairns CBD.
Recently, RPF confirmed the sale of Lidcombe Hotel in Sydney for $6.55 million.
Earlier, pubs at Kooringal ($7.51 million), Cedars Mt Druitt ($12.05 million) and Cabramatta ($21.5 million) were also sold.
Further sales are expected to be announced soon.
The company reported an underlying net profit (from day-to-day operations) of $4 million, compared with $4.9 million the year before.
Financial commenators said this represented poor yield value for investors.
"You’d be better off just putting your money in the bank," one Cairns analyst told Business Week.
According to a statement provided on the ASX website, banks have provided Redcape with a loan extension from August 2010, when it was expected to have been repaid, to October 31, 2012.
But this loan extension includes higher interest rate margins along with a restriction on distributions and a condition Redcape cut debt further.
The half year was a turbulent period for the company with receivers appointed to 10 hotels run by major shareholder Hedz Pty Ltd, a company owned by Cairns businessman Tom Hedley.
The Hedley name was subsequently dropped and replaced with Redcape, while the company’s headquarters has shifted from Cairns to Melbourne.
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