Villa World : 18 Sep 2017 - Gold Coast's Villa World notches up fourth straight profit year

16 August 2017

Gold Coast's Villa World notches up fourth straight profit year

Gold Coast-based Villa World has posted its fourth consecutive full-year profit growth, announcing a $37.8 million net profit after tax, up 12% on the previous financial year.

The Company says its continued strong profit result is part of a long-game strategy, and predicts further sales growth as sold-out developments are replaced with new flagship projects in Victoria and Queensland.

This includes the recently released Arundel Springs offering 386 new home sites on one of the last remaining land parcels on the central Gold Coast.

The Arundel project marked Villa World's major return to the Gold Coast market following strategic expansion of its development activity in southeast Queensland in recent years.

Villa World Managing Director and Chief Executive Officer Craig Treasure said continued sales momentum combined with outstanding delivery of land and housing had resulted in 1,154 lots settled in FY17.

While the bulk of FY17 sales were in Queensland, Villa World recorded strong sales from a return to the New South Wales market, with its land-only estate south of Sydney fully sold and housing product in western Sydney well received by the market.

Villa World's turnkey house-and-land packages, and land only offerings in Melbourne's growth corridors also sold strongly.

Following successful capital raising transactions in March, Villa World completed several strategic acquisitions to replenish its project pipeline and ensure strong ongoing cash flow and growth.

The Company will carry forward 526 sales contracts worth $175.7 million into FY18. Three-quarters of those contracts, worth $127.6 million, are due to settle by December 2017, with a further $38.6 million to settle by 30 June 2018 and the balance settling in FY19.

Mr Treasure said the strong carry forward position combined with continued buoyant sales, placed the Company in an excellent position for FY18 and beyond, and with a fully-stocked project pipeline of around 6.5 years 7,832 lots.

He said that with more than 15 large scale residential projects selling during FY18, Villa World is expecting a further sales surge as well as increased income from existing joint venture projects.

Given project and sales lead times, earnings are expected to be significantly weighted to the second half of FY18.

Villa World will release flagship projects The Meadows, at Strathpine on Brisbane's northside, Chambers Ridge, at Park Ridge in Logan, and Corella, at Greenbank as part of its southeast Queensland portfolio, along with projects at Clyde and Wollert in Victoria.

Mr Treasure said a four-year comparison showed Villa World had achieved a step-change in its business model, with profit almost doubling (from $19.1 million in FY14), and revenue up 68% over that time (from $229.5 million in FY14 to

$386.8 million in FY17).

The ASX300 residential property developer has delivered cumulative growth in earnings per share (EPS) of more than

14% per annum since FY14, with an FY17 EPS result of 32.5 cents per share.

Villa World declared a 10.5 cent fully franked dividend, bringing the full-year dividend to 18.5 cents per share (FY16:18cps). This represents a yield of ~8%.

The Company has forecast profit growth of 10% to $41.6 million in FY18, representing EPS of 32.8 cents per share. The Villa World Board anticipates paying total dividends of at least 18.5 cents per share fully franked in FY18.

Established in 1986, Villa World is a leading east coast residential developer delivering success through property.

CEO and Managing Director, Craig Treasure Telephone (07) 5588 8888 securityholder@villaworld.com.au