Growing consumer confidence in New South Wales is driving the beginnings of a housing recovery, 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 its 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. "We're certainly entering this year with upward momentum," Mr Summer said.
In Queensland, transactions 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", but the company's financial statements show revenue has slumped sharply, down to $28 million, a 60 per cent fall from the previous year.
"In terms of contribution to results, it's come off hard," Mr Summers said.
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 to deliver new projects, he said.
Completed and unsold stock were at acceptable levels, Mr Summer said.
Anton Whitehead, the director of equity capital markets at Bell Potter, said the numbers from AVJennings were further evidence that the early stages of a housing recovery was beginning.