AVJennings stay away from CBD over-supply for 19 percent FY16 profit boost
Melbourne based residential developer AVJennings continue to make profits in the housing boom, showing a 19 percent profit increase in FY16.
The company stayed away from the over-supplied CBD high-rise markets and saw their net profit rise to $40.9 million.
The profits came due to its increased housing lot sales, with chief executive Peter Summers suggesting traditional housing had the steadiest outlook.
"Our markets, that is the traditional housing markets, remain under-supplied."
"The customer base is traditional, stable, domestically based and in need of housing, rather than speculators."
The growing revenue hit $421.9 million, an increase of 32.7 percent, and the full-year dividend payout rose by 25 percent to 5¢.
Below are AVJennings FY16 results
AVJennings pipeline plans are extensive, with developments planned all over Australia and one in New Zealand.
Summer acknowledged the widespread concerns of oversupply, but suggested that it's concentrated on the CBD apartment markets, and there's a large under-supply of housing in the wider market.
"We've been saying for some years that we believe this type of product of apartment construction is the wrong type of product for many Australians and it has created too much product in certain markets."
"Our strategy has been to focus on a stable base of traditional buyers.
"We haven't chased what see as potentially more risky markets for short term gain."
AVJennings offshore buyers only represent one percent of their purchasers.