Property developer Mirvac has criticised institutions for dumping its stock and misreading the Asian crisis as it reassured shareholders it has a strong future despite its share price almost halving over the past year.
Chairman Adrian Lane and managing director Robert Hamilton were asked a series of questions by disappointed shareholders at the annual meeting in Sydney yesterday.
Mr Hamilton downplayed the Asian crisis effect, arguing buyers from the region were never more than 4 per cent of total sales. Mirvac lifted its annual profit 26 per cent to $38.1 million in 1997-98, albeit from an expanded capital base after a $100 million rights issue last September
After taking up most of his rights, Mr Hamilton, who still controls about 8 per cent of Mirvac, told shareholders "we are just as disappointed as you", when pressed about the shares which have tumbled from $2.85 last October to yesterday's $1.63 close.
He said Asia's crisis had hit sentiment for the property industry along with most smaller listed companies, but Mirvac was on a higher price-earnings ratio than its competitors.
Asked by The Daily Telegraph why shares in rival Melbourne-based flats builder Central Equity had risen 25 per cent over the year and Mirvac fallen by a similar amount, he said Central Equity shares were tightly held by its management and rising from a lower base.
Mr Hamilton admitted former major holder Lend Lease "obviously picked the best time to sell" when it dumped 25 million Mirvac shares for $2.68 last September, dropping from 25 per cent to just 9.5 per cent.
However, Lend Lease's representative on the Mirvac board, Stephen McMillan, assured shareholders the relationship remained "first class" and would continue over the longer term.
Mr Hamilton said Mirvac fell out of Lend Lease's consortium developing CSR's giant $800 million Pyrmont refinery site as it is focusing on the nearby $650 million Walsh Bay project, a rival project in partnership with Transfield.
However, the two are pursuing developments at the new Olympic suburb Newington, Twin Waters on Queensland's Sunshine Coast and Lend Lease subsidiary Civil and Civic is also building the Quay West apartment development at Melbourne's Southbank.
Mr Hamilton admitted this final project was taking a long time to develop because "you have got to go down for miles to get a firm base" on the south side of Melbourne's Yarra River.
The company had secured only 33 per cent pre-sales on its Liberty Gold Coast apartment project and, while investors weren't queueing to buy, Mirvac was "quite satisfied" with progress.
Mr Hamilton dismissed recent concerns by Harry Triguboff, billionaire owner of prolific flats builder Meriton, that mortgage insurers had abandoned parts of the apartment market.
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