RESIDENTIAL developer Devine Limited (ASX:DVN) announced a loss before tax of $15 million for the half year to December 31, but expects to return to profit in the 2014 calendar year.
The Statutory Net Loss before tax of $85 million was a product of a $70 million impairment, DVN announced today.
The company expects to return to profit in the 2014 calendar year with a range of between $7-10 million.
Managing director and CEO David Keir says the company is focused on short-term capital recycling initiatives and has undertaken a corporate and operational restructure as a result of the loss.
“The capital recycling plan will see an exit from a number of selected assets to facilitate investment in higher margin opportunities and return the company to profitability,” says Keir.
First home buyer activity remains low, but Keir says investment purchasers and second home buyers are returning to some markets.
“Market fundamentals, headlined by low interest rates and the demand-supply imbalance, combined with the quality of Devine’s product and place offerings support an improved level of trading over the next 12 months.”
Sales results for the most recent quarter were strong and there has been a strong level of carry-in sales for calendar year 2014. Over 40% of forecast housing starts for CY14 are secured at December 2013.
Sales of the remaining apartments at Hamilton Harbour and DoubleOne 3 projects are progressing well.
Devine’s latest apartment project, Mode at Teneriffe in Queensland will be launched to the market in March 2014.
Devine Constructions’ progress on the Company’s DoubleOne 3 apartment project is expected to be completed in June.
The construction business has also commenced on the recently secured Queensland projects for external clients, Vida at West End and Alex Perry in Fortitude Valley.
DVN is trading down 0.68 per cent at $0.730.
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