Villa World : 17 Feb 2017 - Villa World eyes Logan and Gold Coast to stoke further growth in residential house and land sales

15 February 2017

Villa World eyes Logan and Gold Coast to stoke further growth in residential house and land sales

Flagship projects in Logan and at Arundel on the Gold Coast will deliver continued residential house and land sales growth for leading local property developer Villa World.

The Company marked its half-year with another strong profit result supported by robust sales and increased revenue.

Villa World announced a half-year statutory net profit after tax of $19.6 million (17.4 cps), compared to a net profit after tax of $20.4 million (18.5 cps) for the half year to 31 December 2015. This is within the half-year guidance range of $19.5 - 21.4 million released on 6 December 2016, with sales at certain Victorian land and housing projects carried forward into 2H17.

Managing Director and Chief Executive Officer Craig Treasure said Villa World was primed for a strong end-of-year result, off the back of a 35% increase in half-year sales (1H17: 673 sales; 1H16: 497) and around $192 million in carried forward sales contracts.

Around 86% of those contracts (479 lots valued at $161 million) are expected to settle in 2H17, with the balance settling in FY18.

Shareholders will benefit from the Company's continued strong financial performance, with Directors declaring an interim dividend of 8.0 cents per share fully franked (1H16: 8.0 cents per share). The Board anticipates paying total dividends of 18.5 cents per share fully franked in FY17, representing a yield of 7.7 percent.

Mr. Treasure said Villa World was well placed to outstrip its FY16 sales performance and achieve at least 1,185 sales.

"The strength of the Queensland housing market, particularly in the Brisbane-Gold Coast corridor and similar growth corridors around Melbourne and Sydney, is continuing to reap excellent results for Villa World," Mr. Treasure said.

Queensland dominated the Company's revenue gains, contributing 84% this half-year (1H16: 86%). The Company also recorded gains in land-only sales and incomes from other sources, although its house and land product continues to dominate, representing 66% of revenue (1H16: 76%).

Mr. Treasure said: "We continue to focus heavily on our core, being the retail market comprising owner occupiers including first home buyers, as well as builders and predominantly local investors.

"These market segments are holding up very well leading us to anticipate steady growth in both sales volumes and price point as we look ahead to the remainder of FY17 and into FY18.

"We are looking forward to releasing new flagship projects at Killara, in Logan, and Arundel Springs, on the Gold Coast, and expect strong market conditions will continue to drive sales."

He said Villa World would continue to consolidate its growth base in Queensland as well as diversify its profile across Victoria and New South Wales.

"We are continuing to replenish land stock through strategic purchases in proven growth corridors and take advantage of opportunities to diversify our geographic footprint along the east coast," he said.

In the half year to 31 December 2016, Villa World acquired 1,496 lots for a total portfolio of 6,386 lots (FY16: 5,937) representing approximately 5.4 years of sales.

In September the Company entered into a joint venture with Greenfield Development Company which will add around 750 lots (50% share) at Greenbank, south of Brisbane, to the Company′s south-east Queensland pipeline.

"Villa World will continue to acquire and diversify, within the Company's strong capital management discipline which has a focus on maintaining prudent gearing," Mr Treasure said.

For enquiries: Craig Treasure

CEO/Managing Director Tel: (07) 5588 8888

securityholder@villaworld.com.au