Joint ventures set up future for Villa
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.
Villa World’s development at Arundel, Arundel Springs, is one of two Gold Coast projects on its books.