Joint venture success buoys Villa World profit

Written on the 14 February 2018 by Business News Australia

Joint venture success buoys Villa World profit

Villa World (ASX: VLW) is on track to deliver its full-year forecast profit growth as the company today announced a $17.3 million statutory profit after tax.

The property developer upgraded its guidance range to $17-18 million in December following a new joint venture project at Wollert in Victoria has since contributed $5.2 million net profit after tax during the half.

Villa World carries forward 610 sale contracts with a gross value of $207.4 million.

During 1H18 the company grew its development and project management income streams by working closely on its joint venture arrangements, including the Wollert development in partnership with Ho Bee Land.

Villa World CEO and managing director Craig Treasure said strong sales, along with new partnerships and earnings from joint ventures, had contributed to the half-year result and would deliver strong forecast earnings through FY19.

"We are on-script with the Company's longer-term strategy to deliver consistent, through-the-cycle growth," said Treasure.

"We have also continued to deliver strong sales through our focus on Villa World's core markets."

Queensland continues to shine for Villa World, contributing 63 per cent of sales during the half. The company also recorded strong growth in the Victorian market which contributed 34 per cent of sales off the back of new project releases including Lilium at Clyde.

"Having fully-stocked our land bank, Villa World is now very much in the delivery phase with flagship projects in Queensland and Victoria coming online," said Treasure.

"We have also leveraged the Company's development and project management skills to take advantage of other income streams through joint ventures and other partnerships."

Villa World's strong result is reflected in the declaration of an interim dividend of 8.0 cents per share, targeting a full-year dividend of at least 18.5 cents per share fully franked.

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