Gold Coast developer Villa World reports drop in sales and declines to reveal FY19 guidance, dividend

Gold Coast’s biggest listed developer has reported a decline in sales and delayed settlements as a downturn in the housing market continues to bite. But the company says things could improve as soon as next week - here’s why.

Villa World's Arundel Residence's streetscape.

GOLD Coast’s biggest listed developer has reported a decline in sales and delayed settlements as a downturn in the housing market continues to bite.

In an operational update to shareholders this morning, Villa World said market conditions and customer sentiment had declined late in 2018 and continued into this year.

Nonetheless, the company recorded 783 sales for the financial year to the end of April, including 266 in the first four months of the calendar year.

Craig Treasure, Villa World, CEO/Managing Director.

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Villa World said a reduction in the availability of customer finance and delayed finance approvals had seen new and carried forward sales taking longer to settle.

It said 80 to 115 settlements previously expected in the second half of the financial year were now likely to settle in FY20.

The company said it would not provide a profit guidance for the financial year due to “the uncertain outlook for the sector and the continued uncertainty of sales and settlement timing”.

It said it therefore could not say whether shareholders would receive a dividend for the financial year.

Arundel Springs Residences.

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The company’s Queensland projects, including Arundel Springs on the Gold Coast, had bucked the downward trend, it said, experiencing “some improvement in sale conditions over recent months”.

Villa World said it expected sentiment to improve after the federal election and was confident its pitch to the affordable housing market in sought-after locations would protect its margins.

The company is currently undergoing due diligence from Avid Property Group, which has proposed a buyout at $2.345 per share.

Villa World shares opened trading today at $2.26 but were down four cents to $2.22 by 1.30pm.