AV Jennings says Federal political climate hurting residential sales as it forecasts financial year loss
Residential developer AV Jennings, which is celebrating its 80th birthday this year, claims the current political climate following the last Federal election may be delaying purchasing decisions, as it forecasts a net annual loss after write-downs of up to $32 million.
In market guidance released ahead of the August 8 full-year results announcement, AV Jennings expects to make a post-tax profit of $5.1 million before accounting for asset write-downs of between $32 million and $37 million.
The write-downs are mainly in regional areas of Queensland and NSW with the company “reassessing its operational strategy in various projects” and revising its "bases and assumptions to determine the carrying value of its assets”.
The developer says there has been “further deteriorating residential market conditions in early 2012, especially in many regional areas and the delay in the timing and the extent of the forecast recovery in Queensland and NSW which had been expected in 2012”.
This, the developer said, had resulted in “reduced volumes and margins from those forecasted”.
NSW residential projects include Seacrest in Sandy Beach, just north of Coffs Harbour, with land priced around $160,000, and house and land packages around $450,000.
Queensland residential projects include the Glenrowan Estate in the village of Walkerston, just west of Mackay with lots priced around the $170,000 mark.
Aside from the political uncertainty, AV Jennings says negative consumer sentiment has been driven by “macro-economic” events in Europe and the US, and the impact of the slowdown in China on Australia.