Home builder AVJennings has booked a lower first-half net profit but says demand for residential land, detached dwellings, townhouses and low-rise apartments remains strong in the company's key markets of Sydney, Melbourne, Brisbane and Auckland.
AVJennings on Monday reported a 14.4 per cent drop in first-half net profit $14.1 million, which it attributed to a change in product mix and the timing of revenue recognition, including for the company's flagship apartment project, Waterline at Williamstown in Melbourne.
Contract signings of 730 lots were lower than the 999 in the prior corresponding period, and settlements of 576 lots were also lower than the 694 a year earlier.
Revenue dropped 16 per cent to $156 million.
However, the company is confident of a strong second-half result, with work in progress at 1,698 lots compared to 1,623 a year earlier.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
"As has been the case for a number of years, the company anticipates a significantly stronger second half, with contract signings for the year to be at a similar level to last year," AVJennings managing director Peter Summers said.
AVJennings said it is continuing to acquire land in the outer areas of Australia's major capital cities and in Auckland, but will continue to diversify its product mix by acquiring medium-density brownfield projects.
The company said that the standout contributor in the first half was NSW.
AVJENNINGS HALF-YEAR RESULTS
*Net profit down 14.4 pct to $14.1m
*Revenue down 16.6 pct to $156m
*Interim dividend 1.5 cents, fully franked.
