Villa World profit up, expects solid 2018 on FHBs, low interest rates
House and land developer Villa World said it had posted its fourth consecutive full-year profit growth.
It guided for a full-year profit after tax of $41.6 million for the 2017-18 financial year, a growth of 10% over FY17 based on the assumptions that interest rates would stay low and first home buyer grants would remain in place.
Villa World said it made a statutory profit after tax of $37.8 million for the financial year ended June 30, up 12 percent from the previous year.
Commenting on the results, CEO and managing director Craig Treasure said in an ASX announcement that Villa World’s strategy of maintaining a pipeline of projects, while also “diversifying both geographically and in our product mix within the residential house and land market”, had generated consistent cash flow for Villa World.
The group said its impressive performance was because of its less exposure to investors, which brings in more volatility.
"We're isolated from a bank shutdown and we only have 20 per cent investors ... as far as international buyers go, there are very few," Treasure told The Australian Financial Review.
Villa World's steady sales, despite a low investor base, show there is a lot of demand left in the local owner-occupier market.
The property group’s settlements of wholly owned lots rose to 1,116 from the previous year’s 1,073, though revenue from them was flat.
Queensland continued to be the biggest contributor to the group’s performance, making up 71% of sales, slightly down from FY16’s 74%. Victorian projects contributed 21% of sales while New South Wales made up the remaining 8%.
The company acquired 3,454 lots in the financial year in northern Brisbane, Logan, north-west and south-East Melbourne, which it said would provide product continuity for several years.
The board has declared a fully franked dividend of 18.5¢ per share in 2017.
Villa World acquires, develops and markets residential land and house and land estates across the east coast.