Villa World reveals slump impact
Sales drop 30pc but house-and-land developer still enjoys rise in profit and shares
GOLD Coast house-and-land developer Villa World has grown its profit despite a national downturn in the housing market which saw its sales fall by 30 per cent.
Announcing its results for the first half of the financial year, Villa World said it logged a $17.6 million after tax halfyear profit, compared with $17.3 million for the same period last year.
Shareholders will receive a fully franked dividend of eight cents per share.
The developer acknowledged cooling demand for its projects in Victoria, with sales sliding to 517 in the six months to December 31 from 742 in the prior corresponding period.
Villa World, which has enjoyed a five-year streak of fullyear profit growth, did not provide a full-year guidance for this year, citing the challenging market conditions and availability of customer credit as well as uncertainty caused by upcoming Federal and New South Wales elections.
Despite the slowdown, the market responded positively to the result, sending Villa World’s share price up by 5.435 per cent to close at $1.94 after opening at $1.815.
Managing director and CEO Craig Treasure said the “challenging” market conditions were part of the cyclic nature of the property industry.
“However, Villa World has a long history of successfully navigating through market cycles and has a forward strategy focused on helping people reach home and long-term value creation,” he said.
“We believe Villa World is well placed to capitalise on opportunities that will arise for astute acquisitions and partnering arrangements.
“In the current market conditions, we have invigorated our sales strategy to highlight our value product offering in our sector.”
The company noted that while sales for the period were down, property settlements for the period were generally consistent with the previous period.
Villa World’s Queensland projects at Strathpine, Logan and Arundel sold well.
Villa World reported 1126 sale contracts carried forward with a gross value of $340.4 million, with settlements from now until 2021.
Mr Treasure said the com- pany’s forward book meant its long-term outlook remained promising.
“The company has conviction that its projects are located where people want to live, its homes are priced within reach of its customers, and its turnkey homes offer a unique customer experience,” he said. “With sound financial fundamentals, prudent capital management and a committed team, the company has the foundations and resources to provide sustained success and shareholder value beyond the current sector dynamics.”