The weaker Australian dollar is expected to help drive a pickup in the retail sector, the head of shopping centres operator Federation Centres says.
Chief executive Angus McNaughton said that while there had been a slow and steady improvement in the retail sector in the past few years, he expected it to get a further kick along from the Aussie dollar’s recent falls.
The dollar has fallen by more than 20 per cent against its US counterpart in the past year and currently is hovering around 73 US cents.
Mr Angus McNaughton said the weaker dollar had helped lower online sales and reduced the number of Australians travelling offshore, meaning there was more money left to spend locally.
“While we forecast a continuance of mixed economic indicators this year, overall, we expect an ongoing steady improvement in the retail environment over the medium term,” he said in a statement on Wednesday.
Federation, which merged with Novion Property Group in June, lifted net profit 68.7 per cent to $675.1 million in the year to June 30.
Total revenue rose 59 per cent to $1.3 billion while the final distribution was lifted to 8.5 cents per security from 8.2 cents.
Federation expects underlying earnings per share to fall to between 18.8 to 19.1 cents per security during the 2016 financial year, reflecting the sale of five of its shopping centres.
The group reported EPS of 25.2 cents per security for 2014/15, up from 16.5 cents in 2013/14.
Meanwhile, the group’s shopping centre at Chadstone in Melbourne’s eastern suburbs will host the first LEGOLAND Discovery Centre during 2017.
“This unique 2,800 square metre indoor attraction will be a great addition to our world-class shopping destination,” Mr McNaughton said.