Revenue growth drives another strong half-year profit of $19.6m result for Villa World

Leading east coast residential property developer Villa World has marked its half-year with robust sales and increased revenue contributing to another strong profit result.The positive result also prompted an upgrade in the Company’s full year guidance to an after tax profit of $37.5 million, representing growth of 11% over FY16 ($33.7 million).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.Villa World Managing Director and Chief Executive Officer Craig Treasure said the Company 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.Mr Treasure said Villa World was well placed to outstrip its FY16 sales performance and achieve at least 1,185 in sales.Sales jumped in Victoria, contributing 26% for the half-year to 31 December 2016, compared with 20% for the same period during the previous year.Mr Treasure said Villa World was pleased with the sales lift in Victoria, with strong demand at the land only project Cardinia Views, and near sell out of the Company’s turnkey house and land product at Lavinia, and the house and land, and land only offering at Sienna.Villa World 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.Efficient delivery of land and housing developments resulted in 592 accounting settlements during 1H17 (1H16: 550). As a result, Villa World’s revenue increased 5% to $209.4 million (1H16: $200.2 million).The Company delivered 324 lots of land (1H16: 552), with the Company’s housing operations delivering 291 homes across both Queensland and Victoria (1H16: 385).Mr Treasure said: “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.“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.

At 31 December 2016, the Company had a portfolio of 6,386 lots (FY16: 5,937) representing approximately 5.4 years of sales.In 1H17, the Company acquired 1,496 lots. Significantly, the company entered into a joint venture with Greenfield Development Company in Greenbank, south of Brisbane, which will add around 750 lots (50% share), 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.