AVJennings sees signs of recovery
Growing consumer confidence in NSW is driving the beginnings of a recovery in the housing sector, AVJennings chief executive Peter Summers said as the residential developer recorded a full-year loss of $15.3 million.
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.