ASX-listed developer AVJennings has withdrawn its February forecast with depressed sales and enquiry levels weighing on its previous outlook.
The developer and builder, led by Peter Summers, has now backtracked on statements from its half years results in which it projected a stronger financial year compared to its prior results,
The Melbourne-based developer, which specialises in producing both land lots and housing across a range of projects in Australia and New Zealand, is majority-owned by Singaporean developer SC Global.
In an announcement to the ASX the developer said that despite the crisis it remained well placed, with a strong balance sheet, good liquidity and sufficient funding capacity for the medium term.
The developer said settlements of pre-sales had continued to occur largely in line with expectations, with a slight uptick in the number of deferrals.
“While both sales and enquiry levels are below the levels we would have anticipated to see had the Covid-19 crisis not occurred, they are above our short term expectations,” an AJ Jennings spokesperson said.
Across February, March and April the developer secured 100, 57 and 51 net contract signings respectively.
May sales were "tracking broadly in line with April". There had been a "slight uptick" and a "small number" of rescissions, which had previously been rare.
“We believe indicates an underlying level of confidence in the medium and longer term outlook as they are acquiring land for their future operations.
“We hope conditions will improve and the Company’s strong balance sheet and contracts in hand, together with the measures taken to reduce expenditure, leave the company well-placed to navigate this period.”
The company attributed its resilience largely to acquisitions made last year, which have not unnecessarily exposed it to short-term fluctuations in asset values.
In August, the developer lodged plans for a new masterplanned community spanning 410 hectares in Caboolture West, north of Brisbane.
The developer said the proposed masterplanned community of 8,700 lots with initial development parcels yielding approximately 3,500 lots, remained under capital-efficient terms that effectively would share risks and rewards while protecting the company’s balance sheet.
In addition, the company has made efforts to stem the flow of its operating costs.
In noted that the majority of its employees had moved to a four-day workweek, the board of directors has accepted a reduction to their fees, and the Federal Government’s ‘JobKeeper’ subsidy has been secured.
Shares in the company are down nearly 40 per cent so far across 2020 mirroring a wider market downturn.