Villa World posts 34 per cent profit surge

The stage is set for leading residential developer Villa World to celebrate 30 years as a listed company in 2016 with a record $40.5 million profit, after today posting a 34 per cent profit surge.The Queensland-based company scaled up its delivery of land and construction during FY15, pushing up full-year revenue by 40 per cent to $321.6 million and leading to a strong carry forward of more than $134 million in sales contracts.Managing director and chief executive officer Craig Treasure said the company was well positioned to maintain its growth trajectory.“We end the year as we planned: a strong cash flow, high growth business,” Mr Treasure said.Villa World declared a final dividend of 10 cents per share, bringing the full-year dividend to 16 cents per share fully franked, representing a 7 per cent yield.Strong operating cash flows, as well as a successful capital raising in January 2015 enabled the company to spend $102.1 million on new land acquisitions and restocking.The company has a portfolio of 5,191 lots, up from 3,925 at the same time last year and representing around five- years of sales.Villa World today reported a net profit after tax of $25.6 million, up from $19.1 million in FY 14. The result included a previously announced $8.9 million provision for legacy litigation.The company exceeded guidance by recording a pre-tax profit of $29.4 million, up from $22.6 million.Net assets at year end were $220.6 million, up from $180.2 million in FY14.Established in 1986, Villa World is Queensland’s longest-established ASX-listed housing developer and joined the ranks of the S&P/ASX300 in March.Mr Treasure said Villa World’s strong balance sheet and refocussed sales strategy placed the company on track to achieve sustainable, through-the-cycle performance in the years ahead.“We continue to focus on delivering value for money in the well-performing affordable and mid-price market,” Mr Treasure said.“Our acquisition strategy has enabled us to provide more product across more markets and at a broader price point.“We have double the number of lots in our project pipeline compared to two years ago, located within strategic growth corridors.”The company will outlay around $135 -150 million in acquisitions during FY16.Mr Treasure said: “The focus will remain on replenishing our land stock in south east Queensland, the south eastern and northern growth corridors of Melbourne, and infill sites in both Brisbane and Melbourne.”Sales across Villa World’s 20 projects rose from an average of 59 per month in the first half-year, to 82 per month in the second half, weighted heavily toward the Queensland market (81 per cent of total sales).“We recorded particularly strong sales from projects in Brisbane’s north and bayside,” Mr Treasure said.Mr Treasure said operational efficiencies and a refocussed sales strategy that had delivered strong gains in FY15 and would continue to deliver success in FY16.Villa World will target FY16 sales of between 1,000 and 1,200 and a profit before tax of $40.5 million, representing growth of 38% on the FY15 result. With the company returning to an effective tax rate of 30%, Villa World has forecast a full year profit after tax of $28.35 million in FY16.Villa World FY15 Results Summary:- Statutory profit after tax$ 25.6 million (FY14:$19.1million)- Profit before tax $29.4 million (Exceeds guidance of May 2015)- 10cps fully franked final dividend declared post balance date; full year dividend of 16cps- 364 sale contracts carried forward into FY16 with a gross value of $134.1million- FY16 guidance of profit before tax of $40.5 million, weighted toward second half