Sunland : Appendix 4D

$A'000	UP/DOWN	%MOVEMENT
Revenues from ordinary activities	102,723	up	22.0%
Profit from ordinary activities after tax	5,009	up	58.1%
Net profit for the period attributable to members	5,009	up	58.1%
DIVIDEND INFORMATION (AMOUNT PER SECURITY)	31 DECEMBER 2016	31 DECEMBER 2015
Interim dividend- fully franked at 30%	4 cents	3 cents
INTERIM
Date the dividend is payable Record date for determining entitlements to the dividend	23 March 2017 9 March 2017
DIVIDEND PAID

A final fully franked dividend for the 2016 financial year of 5 cents per share ($8,191,490) was paid on 22 September 2016.

EARNINGS PER SECURITY (EPS)	CURRENT PERIOD	PREVIOUS CORRESPONDING PERIOD
Basic EPS Diluted EPS	3.1 cents 3.1 cents	1.8 cents 1.8 cents
NET TANGIBLE ASSETS PER SECURITY	31 DECEMBER 2016	31 DECEMBER 2015
Net Tangible Assets	220 cents	206 cents

Acquisition of controlled entities during the period

There were no acquisitions of controlled entities.

Details of entities over which control has been lost during the period

Sunland Funds Management Limited was sold to an unrelated party on 13 July 2016.

The below entities were dormant as a result of ceasing operations and were deregistered during the period.

NAME DATE CONTROL LOST

Stanride Pty Ltd 10 August 2016

Mortdella Pty Ltd 10 August 2016

Sunland Group UAE (Australia) Pty Ltd 10 August 2016

Palazzo Versace Australia Pty Ltd 10 August 2016

Sunland Foundation (GC) Pty Ltd 10 August 2016

This information should be read in conjunction with the most recent annual financial report. Additional information supporting the Appendix 4D disclosures can be found in the Financial Statements for the half-year ended 31 December 2016.

SUNLAND GROUP LIMITED and its Controlled Entities ABN 65 063 429 532 Consolidated interim financial report for the half-year ended 31 December 2016

Sunland Group Limited Directors' Report 31 December 2016

Directors' Report

The Directors present their report together with the financial report of Sunland Group Limited and its controlled entities (Sunland or the Group), for the half-year ended 31 December 2016 and the independent auditor's report thereon.

Directors

The following persons held office as Directors of Sunland Group Limited during the financial period: Mr Soheil Abedian, Executive Chairman

Mr Sahba Abedian, Managing Director

Mr Ron Eames, Non Executive Director

Mr Craig Carracher, Non Executive Director Mr Chris Freeman AM, Non Executive Director

Principal activities

Sunland Group Limited is a company limited by shares that is incorporated and domiciled in Australia. The principal activities of the consolidated entity are residential property development and construction, for which there was no significant change during the period. The Group conducts these activities through its two core business segments of "Residential Housing and Urban Development" and "Multi-Storey Development". The Residential Housing and Urban Development segment comprises medium density integrated housing developments and land subdivision. The Multi-Storey segment comprises medium-rise projects generally between five and 15 storeys, and high-rise developments 16 storeys and above. The delivery of Sunland's projects are completed by specialist in-house teams experienced in land acquisition and project feasibility analysis, design, project management, construction, and sales and marketing. The vertically integrated structure of the Group ensures the efficient delivery of projects to achieve Sunland's desired project returns.

Consolidated result

The consolidated profit after income tax for the half-year attributable to members of Sunland Group Limited was $5.0 million (1H 2016: $3.2 million).

Operating and Financial Review

Operating and financial highlights

• Net profit after tax of $5.0 million with earnings weighted to the second half of the financial year as existing projects such as Abian (QLD), Magnoli Residences (QLD), Carré Residences (VIC) and Dahlia Residences (NSW) are delivered and settlements commence

• Directors reaffirm full year guidance of $35 million net profit after tax

• The Group declared a fully franked, interim dividend of 4 cents per share to be paid 23 March 2017

• Strong balance sheet capacity, with $4.1 million in cash and $82.3 million in undrawn working capital lines.

• New site acquisitions in Sydney, Gold Coast and Brisbane totaling $47 million for the period

• Basic earnings per share of 3.1 cents (1H 2016: 1.8 cents)

• Gearing remains at acceptable levels with debt to assets 42% and debt to equity 81%. It is forecasted that debt levels will decrease significantly following the settlements scheduled to occur during the second half of the year

• Development margins across the portfolio represent a return on costs of 18%. This is slightly below the target return on costs of 20%, however we expect the result will improve as settlements progress during the second half of the year

• Abian, Sunland's luxury tower in the Brisbane CBD is nearing completion, with settlements anticipated in late FY17 and beyond

• Strong forecast cash flow generated from existing projects during the second half of the year

• Net tangible assets per share of $2.20

Group Operating Activities

Development Portfolio

As at 31 December 2016, Sunland's development pipeline comprised 5,800 land, housing and multi-storey products with a total end value of $3.8 billion, providing a healthy portfolio of premium quality projects to be delivered over the next three to five years. Sunland continued to replenish its development portfolio during the period, with new site acquisitions totaling $47 million in Sydney (Mount Annan), Gold Coast (Greenmount Resort) and Brisbane (Everton Hills), adding 425 allotments to the portfolio with an estimated end value of $389 million.

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