Villa World posts 57 per cent profit surge in half-year financial result

Leading residential developer Villa World today declared a 57% increase in its half-year net profit after tax.Managing Director and Chief Executive Officer Craig Treasure said the result reflected Villa World’s commitment to delivering product diversity combined with its sales, operational and financial strengths.Villa World’s $20.4 million half-year profit after tax result was accompanied by a 49% increase in revenue to $200.2 million, built off the back of its strong Queensland operation and strengthening sales in Victoria.With the company this year celebrating 30 years in business, Mr Treasure said the FY16 half-year financial result was cause for celebration.“Our celebration of success is founded not just in one half or even one year of good numbers,” he said.“Our celebration comes from getting our business fundamentals right and consistently achieving or bettering what we said we would.”Villa World shareholders will benefit from a growth in first half earnings per share of 33% to 18.5 cents per share (cps), with the company serving up a half-year dividend of 8.0 cps fully franked. The company is targeting a total dividend of at least 18 cps in FY16, representing a 9% yield.Mr Treasure confirmed that the company’s 14 Queensland projects had continued to drive Villa World’s performance, contributing 80% of sales during the half-year and 86% of revenue. Growth in its Victorian operation has added geographic diversity to Villa World's product offering.Mr Treasure flagged that the company was now set to return to the New South Wales market through partnering and joint venture arrangements.Villa World Chief Financial Officer Paulene Henderson said: “A strong performance from our delivery team has meant that we have been converting sales to settlements, enabling us to deliver a very strong first half.”The company settled 550 contracts in the half-year, up from 329 in the comparative half year (1H15).With seven new residential projects contributing to sales in 2016, and pre-sales of $107.7 million, Villa World is on track to meet its target of between 1,000 and 1,200 sales in FY16 and deliver a full year net profit before tax of $46.6 million (FY15: $29.4 million).A series of astute acquisitions has enabled the company to maintain its five-year project pipeline and increase product diversity to capture a broader customer segment within the home buyer market.In December 2015 Villa World acquired a 254-hectare site in Strathpine, 19km north of Brisbane CBD. The company also made strategic acquisitions in Logan and at Arundel, as well announcing a premium joint venture project with Ausin Group at Rochedale, on Brisbane's south side.Settlement of the long-running Eynesbury estate late in the half year contributed $3.6 million to the company’s half-year profit.Established in 1986, Villa World is Queensland’s oldest ASX-listed housing developer. More than 40,000 Australians call a Villa World address their home.