Developer Villa World posts 57% rise in profit and signals return to NSW
Villa World, Queensland’s oldest ASX-listed housing developer, said its half-year net profit after tax rose 57%, helped by a strong performance in Queensland and growth in Victoria sales.
Villa World shares were trading up more than 3 percent on the ASX after the earnings announcement.
Chief executive Craig Treasure attributed the result to consistency and “getting our business fundamentals right”.
Villa World posted a half-year profit after tax of $20.4 million, or 18.5 cents per share (cps). Revenue grew 49% to $200.2 million.
It announced a half-year dividend of 8.0 cps fully franked. The company is targeting a total dividend of at least 18 cps in FY16, representing a 9% yield.
Treasure Villa World’s 14 Queensland projects contributed 80% of sales during the half-year and 86% of revenue. Growth in its Victorian operation has added geographic diversity to Villa World’s product offering, said Treasure.
He added that Villa World was set to return to the New South Wales market through partnering and joint ventures.
“A strong performance from our delivery team has meant that we have been converting sales to settlements, enabling us to deliver a very strong first half,” said chief financial officer Paulene Henderson.
The company settled 550 contracts in the half-year, up from 329 in the comparative half year (1H15).
With seven new residential projects contributing to sales in 2016, and pre-sales of $107.7 million, Villa World said it was on track to meet its target of between 1,000 and 1,200 sales in FY16 and deliver a full-year net profit before tax of $46.6 million (FY15: $29.4 million).
Villa World has made a series of acquisitions in the recent past to maintain its product pipeline.
In December it acquired a 254-hectare site in Strathpine, 19 km north of Brisbane CBD. The company also made strategic acquisitions in Logan and at Arundel, and entered into a joint venture with Ausin Group at Rochedale, on Brisbane’s south side.
Settlement of Eynesbury estate late in the half year contributed $3.6 million to the company’s half-year profit, it said.