Developer Villa World announces $6.1m profit guidance

Listed residential property developer Villa World has upgraded its FY16 profit guidance by $6.1 million based on strong business earnings and market conditions.The company also confirmed settlement of the second tranche in the sale of the Eynesbury residential project, west of Melbourne, for $34.5 million (plus GST).The sale price increased from $30 million (plus GST) as part of settlement extension arrangements.Managing Director and Chief Executive Officer Craig Treasure said Villa World was on target to achieve a profit before tax of $46.6 million in FY16, boosting earnings per share growth to 15%.At its full year results announcement on August 19, Villa World had guided to an expected profit before tax of $40.5 million, up from its FY15 result of $29.4 million.Strong earnings and the contribution of the Eynesbury sale completion has prompted the company to upgrade the profit guidance.The company’s net profit after tax (NPAT) will reflect its return to an effective tax rate of 30%, with a target of $32.6 million, up from $25.6 million in FY15 (up 27%).Mr Treasure said finalisation of the Eynesbury project, in which Villa World held a 50% interest, would result in $9.5 million in cash proceeds returned to the company.“This will conclude Villa World’s involvement in that project and allows us to continue our focus on short to medium term ventures that deliver the affordable housing product which we do best,” Mr Treasure said.He said sales numbers continued to track in line with the company’s target range of 1,000 to 1,200 for the year, with seven new projects due to be delivered in FY16.Mr Treasure said Villa World would continue to replenish its five-year project pipeline through strategic acquisitions in growth corridors.Villa World will release its half-year financial result in February 2016, when it will celebrate its 30th year in business.