Lots to love about developing return
GOLD Coast developer Villa World has boosted its fullyear profit – for the fourth consecutive year – by 12 per cent to $37.8 million as it launches new projects in Victoria and Queensland.
The company is forecasting profit to rise 10 per cent to $41.6 million in FY18, bolstered by 526 sale contracts carried forward worth $175.7 million and due to settle in FY18 and FY19.
Villa World settled the sale of 1154 lots during the year and recorded flat revenue of $386.8 million.
It launched eight new projects
including the 386-lot Arundel Springs estate on the Gold Coast.
Chief executive Craig Treasure said it was pleasing to launch Arundel Springs, and other Gold Coast estates, following a decade-long hiatus.
“It is good to have Gold Coast projects back as part of our portfolio,” he said.
“We are seeing the Gold Coast economy performing strongly. We know we are in the lead-up to the 2018 Commonwealth Games and we use that to strengthen our marketing in southeast Queensland.”
Mr Treasure said the company was in a sound position, especially since most of its buyers were first-home buyers or owner-occupiers and not investors.
“It speaks to the resilience of our business model,” he said.
Villa World’s southeast Queensland projects include The Meadows at Strathpine on Brisbane’s northside, Chambers Ridge at Park Ridge in Logan, and Corella at Greenbank, while in Victoria they feature estates at Clyde and Wollert.
It said it has recorded strong sales from a return to the NSW market, with its land-only estate south of Sydney sold out and a positive response from the market to housing product released in western Sydney.
Villa World has a project pipeline of 7832 lots, which it said was enough to last sixand-a-half years.
Hunter Green Institutional Broking’s Charlie Green said the result was “all right” but flagged slow sales in the second half and the company’s expansion into new markets as concerns.
Mr Green said Villa World had released contingencies to compensate for poor sales.
He said the expansion away from Queensland to markets where Villa World has not historically had a large presence, such as Victoria, posed a risk.
Villa World declared a full-year dividend of 18.5¢.