Residential property developer AVJennings Limited has achieved a profit of $16.8 million for the half year ended 31 December 2014 - a 34.9% increase on the same period last year.
Increased production levels in improving market conditions were the catalyst for the strong first half results.
AVJennings Chairman Simon Cheong advised he expects contract signings for the year ending 30 June 2015 in the range of 1,700 to 1,900 lots; up from previous predictions of 1,500 to 1,700 lots.
CEO Peter Summers said consumer confidence was highest in New South Wales, and that Sydney remained the strongest market in the country with a continuing supply shortage and strong demand. The Sydney strength was pushing through to the Central Coast market too.
“Demand in Brisbane continues to rise with positive knock-on to the Noosa, Caloundra and Coomera markets, which are now also firmly in recovery," Mr Summers said.
"The Melbourne residential land market remains stable, with the company generally experiencing good demand on its projects in the east and north-east of the city.
"The South Australian residential market remains stable but subdued overall.”
In a move to expand a current development, AV Jennings recently contracted to purchase two new land parcels at Cobbitty, New South Wales comprising approximately 227 lots adjoining its existing Arcadian Hills project.
Arcadian Hills' first residents moved in during October 2014 as stage one of the Estate had nearly sold out and the release of stage two was brought forward due to demand.
Peter Summers told AV Jennings shareholders that market fundamentals remained positive, with strong consumer confidence bolstered by low interest rates and inflation, underlying housing shortages in some markets (especially Sydney and Auckland), strong population growth and a stable domestic macroeconomic outlook over 2015-2016.
Lots under development continued to grow reaching 1,539 (1,264 lots as at 30 June 2014 and 974 lots as at 31 December 2013), which Summers said is a key indicator of future positive performance. The level of completed unsold stock remains stable and low.
AVJennings controlled 9,418 lots at balance date.
