On behalf of Landcom’s Board of Directors and our management and staff, I am pleased to report that, for the 14th consecutive year, the Corporation has met or exceeded its financial targets set out in the Statement of Corporate Intent, which is a formal agreement with our Shareholder Ministers. Net profit after tax was $54.3 million, some $20.5 million better than forecast, and this result has enabled us to return to the government $59.6 million by way of dividends and income tax equivalents.
Notwithstanding continuing difficult circumstances and uncertainty in the industry, which is still facing low levels of demand, Landcom was able to yet again retain its enviable credit rating. This is testament to the Corporation’s ongoing pursuit of prudent financial and operational practices and the taking of only well-considered risks.
The land development industry is an opportunistic one, in which fortunes can, and often do, change rapidly: cash flow is always lumpy. Demand for residential land and housing is highly influenced by movements in interest rates, employment prospects and the overall level of community confidence. Fortunately, Landcom has a well-structured balance sheet with a manageable proportion of debt to equity, and this has enabled us to cope with downturns in the market, and to be able to respond quickly to opportunities and tasks signalled to us by the government.
There has been an equally satisfactory achievement of most of our nonfinancial targets as is evidenced in the balance of this year’s Annual Report which includes, inter alia, descriptions and photographs of but a few of our projects which collectively demonstrate the versatility and creativity of Landcom’s people.
Over the last decade, the Corporation has completed some industry leading projects, such as the conversion of the old carpet factory site in Five Dock to what is now the showpiece development of Kings Bay. In a similar vein, the former Leyland factory at Victoria Park has been transformed into a most desirable residential and commercial community with over 2,000 dwellings.
The redevelopment of the former Prince Henry Hospital site demonstrates just how well Landcom has been able to preserve and restore historic buildings and to blend new development with existing architecture. This project reflects the sensitivity of the Corporation and its people towards doing things in a way that will benefit the community for many years into the future.
I particularly draw attention to the development known as Park Central in Campbelltown. It is a splendid example of a diverse and attractive range of housing which capitalises on the close proximity of medical facilities, rail and bus transport, the University of Western Sydney and other educational and cultural offerings, as well as an attractive major shopping centre. The creation of a beautiful riparian corridor with water features that cleanse and treat stormwater using natural plant growth is but one example of the way in which Landcom has led and continues to lead in the innovation and implementation of environmental and social sustainability.
For those interested in sustainable, practical and attractive mixed use development, it is worth taking a visit to the new Rouse Hill Town Centre, which has been an extraordinary success since the day it opened. It results from Landcom partnering with a consortium of The Department of Planning and Infrastructure, Lend Lease and GPT.
It is no secret that our management and staff are extremely proud of these results. By any measure, Landcom has a small staff of around 140 people. They include development managers, our graduate cadets, planners, project directors, and those who provide business support services such as marketing and sales, legal counsel, financial management, administration and information technology. Among this relatively small group there exists a culture that is not often apparent in other enterprises: it is a determination to make things happen, to make a difference for the better and to act with integrity. It is this culture that drives the success of the organisation, and the Directors acknowledge and are greatly appreciative of the outstanding efforts of our staff.
The rationale for Landcom’s existence is for it to address market failure and to tackle complex and strategic projects that the government sees as important to the realisation of its urban and regional development objectives. Landcom operates on a level playing field with the private sector: it pays all of the taxes that its industry counterparts pay and is not in any real sense a competitor.
This is because in just about all of our activities we enter into partnerships in one form or another with industry developers and builders. Of course, none of our projects would have come to fruition without the support and help of myriad stakeholders: our state government sister agencies; local government authorities; our civil works contractors and other suppliers; and our carefully selected consultant planners, architects and engineers. Our success here has been by virtue of our staff at all levels excelling in relationship building.
Turning to the future, Landcom has some exciting tasks to tackle. The government has committed the Corporation to delivering, over the next four years in western Sydney, the dwellings equivalent of 10,000 home sites. This is an increase of around 25% on our usual production rate, but the accelerated program is already well underway through land acquisitions, advancing development applications, streamlining design and engineering contracts and mobilising the additional capital that will be needed to fund these works.
Crucially, our Managing Director has met with the CEOs of relevant local government authorities as well as regulatory and other agencies to gather their support for this ambitious program. Given Landcom’s ‘do-factor’, the Directors are quietly confident that the challenge will be met.
Some time ago we commissioned an independent survey of the people and firms with whom we transact business – to find out what they really thought about the way we engage with them. The survey comprised personal interviews with more than 50 people, and while we were modestly pleased with the overall result, there were quite a few areas in which we could have done much better. This led the Board to ask management to conduct a comprehensive business improvement program, which has involved the whole of our staff. It has included simplification of systems, the overhaul of contract documentation, making sure that our actions are always seen as being fair, and that we are always courteous and pleasant to deal with.
The results of the survey and the progress of our improvement program have been shared with the participants. They have appreciated the feedback and have contributed to our improvements. I am pleased to report that the program will be ongoing. Its aim is, of course, to make it easier for people to do business with us.
My ‘overview’ report this year is somewhat longer than usual: at the end of the calendar year I am to retire from the chairmanship after 14 years in the role. There is a need for new blood and different ways of thinking. In consequence, I felt the need to write more about the contribution that Landcom’s people have made to the industry, to the community in general and to the government which has invested in us much confidence.
During the whole of my term in office, my fellow Directors and I have had the benefit of serving alongside our talented Managing Director, Mr Sean O’Toole. It is Sean who has been the visionary and it is Sean who has inspired and led the Corporation with such distinction. I thank him for what I have seen as a productive and thoroughly enjoyable partnership.
This year, Ms Madeline Dermatossian and Ms Kim Cull both retired from the Board after rendering a valuable contribution to the work of the Corporation; they will be missed. We have been fortunate to welcome two new Directors, Mr Robert Hamilton, the well-known founder and former CEO of Mirvac Limited, and Ms Bonita Boezeman, who is also well known for her wide range of skills and expertise.
Finally, I thank my fellow Directors for their support, their encouragement and good humour. They have provided me with wise counsel and friendship, and they have always acted in a collegiate manner. I thank this and other governments for granting me the privilege of serving as Chairman of the Board and I wish Landcom good fortune. It is a fine organisation.
William Kirkby-Jones AM