AVJennings profit plunges 90pc as settlements stall

AVJennings profit plunges 90pc as settlements stall

Mr Summers said he wasn’t blaming the media, which “does a responsible job in most cases”, but said the constant reporting on the housing market and “extreme elements” of some stories making the front pages of newspapers had hurt overall confidence.

Asked when consumer confidence might rebound, Mr Summers said he could not say. “We’re reasonably confident about the medium term, but short-term conditions are tough.”

Profits plunged

Over the six months to December, net profits plunged to $1.42 million from $15.48 million in the year-earlier period. Revenue slumped 39 per cent to $113.25 million with Victorian revenue halving to $20.3 million.

AVJennings, which is majority-owned by Singaporean developer SC Global, flagged the weak first-half result just before Christmas.

This, the developer said, was due mainly to settlement delays across a number of projects in NSW and Victoria, meaning about $11 million in profits could not be recognised in the first-half of the year.

Despite expectations of a stronger second-half of the year when 532 lots are due to settle alongside 157 lots which settled after December 31, AVJennings said the “full-year result will be softer than that for FY18”.

“We are seeing first-home buyers re-enter the market, which is pleasing, but second and subsequent buyers are not currently confident to contract prior to selling their existing home, so the transaction chain is slower across the board,” Mr Summers said.

AVJennings did not disclose the total number of lots settled in the first half of the current financial year. A year ago it settled almost 600 lots over the same period.

The developer has a pipeline of almost 10,000 lots with its biggest projects being Lyndarum North in Wollert in Melbourne’s north with 2150 lots, Riverton in Jimboomba in SE Queensland with 1196 lots and Warnervale on the NSW Central Coast with 595 lots.

AVJennings declared an interim dividend of 1 cent per share fully franked, down from 2 cents for the same period last year.

AV Jennings’ interim financial results.  

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