Gold Coast developer Villa World has increased its profit despite a downturn in the housing market

Listed Gold Coast house-and-land developer Villa World has unveiled its results for the first half of the year as the sector contends with a national downturn in the housing market.

First home buyers swooped in on Villa World’s 714-lot masterplanned Killara community, with first home buyers accounting for approximately 50 per cent of sales.

GOLD Coast house-and-land developer Villa World has grown its profit despite a national downturn in the housing market which saw its sales fall by 30 per cent.

Announcing its results for the first half of the financial year, Villa World said it logged a $17.6 million after tax half-year profit, compared with $17.3 million for the same period last year.

Shareholders will receive a fully franked dividend of eight cents per share.

The developer acknowledged cooling demand for its projects in Victoria, with sales sliding to 517 in the six months to December 31 from 742 in the prior corresponding period.

Villa World has enjoyed a five-year streak of full-year profit growth, did not provide a full-year guidance for this year, citing the challenging market conditions and availability of customer credit as well as uncertainty caused by upcoming Federal and New South Wales elections.

Despite the slowdown, the market responded positively to the result, sending Villa World’s share price up 4.35 per cent to $1.92 by 1pm from an opening price of $1.815.

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Villa World chief operating officer Michael Vinodolac with managing director and chief executive officer Craig Treasure. Photo: Supplied

Managing director and CEO Craig Treasure said the “challenging” market conditions were part of the cyclic nature of the property industry.

“However, Villa World has a long history of successfully navigating through market cycles and has a forward strategy focused on helping people reach home and long-term value creation,” he said.

“We believe Villa World is well placed to capitalise on opportunities that will arise for astute acquisitions and partnering arrangements.

“In the current market conditions, we have invigorated our sales strategy to highlight our value product offering in our sector.”

AFFORDABLE HOUSING WILL BE KEY: VILLAWORLD

Villa World’s 714-lot masterplanned Killara community at the Logan Reserve.

The company noted that while sales for the period were down, property settlements for the period were generally consistent with the previous period.

Villa World’s Queensland projects at Strathpine, Logan and Arundel sold well.

Villa World reported 1126 sale contracts carried forward with a gross value of $340.4 million, with settlements from now until 2021.

Mr Treasure said the company’s forward book meant its long-term outlook remained promising.

“The company has conviction that its projects are located where people want to live, its homes are priced within reach of its customers, and its turnkey homes offer a unique customer experience,” he said.

“With sound financial fundamentals, prudent capital management and a committed team, the company has the foundations and resources to provide sustained success and shareholder value beyond the current sector dynamics.”