Joint ven­tures set up fu­ture for Villa

The Gold Coast Bulletin - - BUSINESS - ALISTER THOM­SON alister.thom­son@news.com.au

DE­VEL­OPER Villa World says its joint ven­ture strat­egy will un­der­pin rev­enue growth and prof­itabil­ity for years to come.

The Broad­beach-based com­pany yes­ter­day said its half-year net profit was $17.3 mil­lion, well above its Au­gust guid­ance of be­tween $10 mil­lion and $12 mil­lion.

How­ever, the re­sult was 12 per cent down on the prior cor­re­spond­ing pe­riod.

The com­pany, headed by man­ag­ing di­rec­tor Craig Trea­sure, said it was on track to de­liver full-year net profit of $41.6 mil­lion due to stronger sales in 2H18.

Mr Trea­sure said joint ven­tures with Sin­ga­pore’s Ho Bee Land in Wollert and pri­vate eq­uity group CVC in Don­ny­brook, both in Mel­bourne, had laid a solid foun­da­tion for the com­pany.

“A high­light this half has been con­tin­ued ex­e­cu­tion of our joint ven­ture strat­egy and that played out in the joint ven­ture with Ho Bee in Mel­bourne and the sale of Don­ny­brook, which will bring us good rev­enue and profit for a num­ber of years,” Mr Trea­sure said.

Villa World’s $84 mil­lion tieup with Ho Bee in Wollert was a ma­jor fac­tor be­hind rev­enue from joint ven­tures jump­ing 359 per cent to $8.7 mil­lion in the first half.

The com­pany said the staged sale of the Don­ny­brook parcels in Vic­to­ria to Blue­ways Hold­ings would un­der­pin earn­ings from FY20 through to FY23.

Mr Trea­sure said the firsthalf re­sult was pleas­ing and un­der­lined the com­pany’s strat­egy, not just to un­der­take joint ven­tures, but also have a spread of projects in dif­fer­ent states.

“The fact we have de­liv­ered an­other strong re­sult off a broad cross-sec­tion of projects, in Bris­bane, Syd­ney, Mel­bourne and the Gold Coast, shows the busi­ness is per­form­ing re­ally well. That is the most pleas­ing thing from my per­spec­tive.”

Rev­enue from prop­erty sales in 1H18 fell 3 per cent to $202.2 mil­lion, while sales of house-and-land pack­ages dropped 4 per cent to $133.1 mil­lion.

How­ever, lot sales in­creased 6 per cent to 715 and set­tle­ments jumped from 592 in 1H17 to 630 in 1H18.

Al­most two-thirds of sales in the first half came from the Queens­land mar­ket, with Mr Trea­sure stat­ing he ex­pected ro­bust per­for­mance from the Gold Coast mar­ket.

Villa World has two Gold Coast projects on its books: Arun­del Springs at Arun­del and Lyra at Hope Is­land.

“I think the Gold Coast has been the strong­est place for us in Queens­land so that is great to see be­ing a longterm Gold Coaster,” Mr Trea­sure said. “I was … con­cerned how that eco­nomic strength would be main­tained af­ter the Com­mon­wealth Games. But there seems to be a lot of other in­fra­struc­ture work and build­ing projects com­ing on­line that will take over a lot of that heavy lift­ing.”

Villa World’s share price closed 5¢ or 1.92 per cent lower at $2.55.

Pic­ture: SUP­PLIED

Villa World’s de­vel­op­ment at Arun­del, Arun­del Springs, is one of two Gold Coast projects on its books.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.