"2015 was another strong year for Aldar and Abu Dhabi. We continued to deliver against our strategy of growing recurring revenue assets, de-risking our balance sheet, and monetizing our land bank. This success has created a more stable and mature company, one that can withstand any possible challenge in the market."
Abubaker Seddiq Al Khoori, Chairman
Gross profit from recurring revenues was up 49% to AED 1.5 billion supported by the stabilisation of new assets, predominantly Yas Mall and the expanded residential portfolio. The increased contribution of recurring revenues also supported gross profit margins leading to a better underlying quality of earnings.
Debt management has been a key focal point for the Group over the last several years. Gross debt has reduced from AED 13.8 billion two years ago to AED 6.0 billion as at 31 December 2015. The balance sheet has been further strengthened by collection of receivables which has led to the further debt pay down and build up in cash, resulting in a leaner and financially flexible balance sheet today.
The 2015 proposed dividend was 10 fils, up from 9 fils in 2014, representing 11% growth. From 2016, the Board has approved a dividend policy based on the underlying cash flow performance of the business. This will be based on a 65-80% range of the distributable free cash flow from 100% owned investment properties and operating businesses and a discretionary pay-out based on the realised cash profit of completed developments. This is a major change to the capital allocation strategy, demonstrating the Group’s ambition to commit to shareholder returns.
Our recurring revenue assets, which predominately include the asset management business reached stabilised, mature levels of occupancy over the course of 2015. This stabilisation delivered 49% growth in recurring revenue gross profit during the year.
Aldar announced three new development projects at CityScape 2015, Meera, Mayan and West Yas. These followed the successful sales launch of Al Merief in March 2015 which was fully sold off-market.
Off-plan sales were strong in 2015, Aldar recorded AED 3.0 billion in development sales across over 900 units. As at 31 December 2015, 73% sold across all launched projects into the market.