AVJennings sees signs of recovery
The loss was limited by a pick-up in revenue, particularly in the key NSW market, and after-tax profit of $3.8 million in the second half of the financial year.
The company was forced to write down the book value of its assets by $23 million after the residential market hit rock bottom midway through last year.
A similar slump in earnings and profits, coupled with a more optimistic outlook, was recorded for rival developer Stockland.
AVJennings' revenues bounced back in the six months to June as income from house and land sales doubled in the second half to $158 million, a result still substantially below the previous year's.
"We're certainly entering this year with upward momentum," Mr Summers said.
He said transactions in Queensland were recovering, albeit off a low base. NSW was also "well into its recovery" following a rise in settlements and contracts, he said.
"Consumer confidence seems to have lifted over the last six months in particular, reversing a decade-long trend." Activity in Victoria was "fair", he said, but the results showed revenue had slumped sharply, down to $28 million, a 60 per cent fall from the previous year.
Auckland, which was going through a strong growth phase, would also contribute.
The company had restructured its debt for another two years and raised $40 million in an April entitlement offer to settle on development sites and deliver new projects. Completed and unsold stock were at acceptable levels, Mr Summers said.
The numbers were further evidence that the early stages of a housing recovery were beginning, Bell Potter's director of equity capital markets, Anton Whitehead, said.
Frequently Asked Questions about this Article…
AVJennings recorded a full-year loss of $15.3 million largely because it wrote down the book value of assets by $23 million after the residential market hit rock bottom midway through the year. The loss was partly offset by a pick-up in revenue, including an after-tax profit of $3.8 million in the second half.
Yes. AVJennings' CEO Peter Summers said growing consumer confidence in NSW is driving the beginnings of a recovery, with a rise in settlements and contracts indicating NSW is 'well into its recovery.' Analysts at Bell Potter also described the results as evidence the early stages of a housing recovery are beginning.
Revenue bounced back in the six months to June, with income from house and land sales doubling in the second half to $158 million, although that level remained substantially below the previous year’s total.
AVJennings cites NSW as the key market driving recovery, Queensland transactions are recovering off a low base, Victoria activity was described as 'fair' (with revenue down to $28 million, a 60% fall), and growth in Auckland is also expected to contribute.
The company restructured its debt for another two years and raised $40 million in an April entitlement offer to settle on development sites and deliver new projects. Management also reported completed and unsold stock were at acceptable levels.
The article notes that rival developer Stockland recorded a similar slump in earnings and profits but also had a more optimistic outlook, indicating both developers faced tough market conditions yet saw early signs of improvement.
AVJennings wrote down the book value of its assets by $23 million after market conditions deteriorated, which materially contributed to the full-year loss, even as revenue improvements in the second half helped limit the overall impact.
Bell Potter’s director of equity capital markets, Anton Whitehead, said the company’s numbers were further evidence that the early stages of a housing recovery were beginning, supporting management’s view of upward momentum into the new financial year.
Call 1300 880 160
Start a chat
Schedule a call
