A DOUBLING of housing production over the past three years has helped Villa World (ASX:VLW) beat a revised profit forecast earlier this year and put it on track for record pre-tax earnings of $40 million this current financial year.
The city's largest listed developer has finished the 2015 financial year with a bottom-line profit of $25.6 million, up from $19.1 million a year earlier.
This comes as pre-tax profit surged to $29.4 million, higher than a revised target in May of between $26 million and $28 million after the company took into account a $6.5 million provision for a legal action involving an apartment building completed in 2009.
Chairman Mark Jewell says 2015 has been a year of success and the company is benefiting from the strategies and vision formulated over the past three years.
He says the company has grown market capitalisation to $247 million, around four times more than three years ago. The company's share lifted more than 5 per cent to a high of $2.36 on the profit news today.
"As the oldest Queensland founded ASX-listed housing development company and one of Australia's largest land and housing providers, Villa World looks forward to celebrating 30 years as a listed company in 2016 by reaching for the next level," says Jewell.
"We have the fundamentals in place to maintain earning momentum and the capacity to fund value accretive acquisitions and restock in key growth locations, underpinning our future profitability."
During the 2015 financial year the Broadbeach-headquartered business continued to execute its acquisition strategy, acquiring 2769 lots worth $133 million across 12 Queensland and three Victorian projects.
Sales momentum continued, delivering 816 settlements which increased revenue to $321.6 million.
The company recorded 843 sales during the 12 months ending June 30, with sales rising from an average of 59 a month in the first half of the year to 82 per month in the second half.
"We are selling more properties and converting those sales into settlements, resulting in a 40 per cent increase in revenue and contributing to our 30 per cent increase in net profit before tax," says CEO and managing director Craig Treasure (pictured).
"We are happy to be part of the lives of 35,000 customers who are living in our homes and next year we are looking forward to adding more."
Treasure says the company is targeting statutory profit before tax of $40.5 million in FY16, and profit after tax of $28.35 million.
"The increase in profit is really driven by our increase in sales," says Treasure.
"We have targeted to do between 1000 and 1200 sales in that year (2016). We have seven new projects to be released in the coming six months so it is really about covering more geography with more projects which enables us to continue to lift that profit level."
During 2015 Villa World returned to its hometown with its Parkside project in Coomera, which compromises 108 family homes set around a central park and bound by bushland and a nature reserve. It is also planning to develop 107 homes at nearby Jacobs Well.
"We are very pleased to be back in the Gold Coast market with our Parkside project at Coomera and delivering really good first and second homebuyer packages back in the Gold Coast market which we haven't been in for some time," says Treasure.
"We are also looking at other opportunities on the Gold Coast because we would really like to build a stronger presence here.
"We are well capitalised to take advantage of any opportunities in the market and we are really targeting three areas - the growth corridors in Melbourne, the Gold Coast and the Logan corridor."
Villa World is paying a 10c final dividend, which comes on top of a 6c interim payout.
"We have just declared our 16c full year dividend which is approximately a 7 per cent yield and that makes the shares a real value proposition," says Treasure.
"Investors are really struggling to find a yield of that level in any form of investment at the moment so we think it is pretty attractive."
The company will carry forward 364 sales contracts worth $134.1 million into FY16.
As at 30 June the company has a portfolio of 5191 lots 60 per cent of those are based in Queensland and 40 per cent in Victoria.
The latest profit result includes an $8.9 million provision for two pending "legacy" legal actions, including the $6.5 million for Silverstone and $2.4 million for Thornleigh.
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