AV Jennings says its 91pc profit plunge is partly due to ‘sensationalist’ coverage of the housing downturn
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AV Jennings has been hit by a 91 per cent downturn in profits.
In its half-year report, the house and land developer showed a profit after tax of $1.421 million. The same report last year showed a profit after tax of $15.482 million.
It’s blaming “softer trading conditions in key markets”, but says the result is consistent with previous statements made to the market prior to the balance date.
In December, AV Jennings (ASX:AVJ) told investors to expect earnings for financial 2019 to be “even more heavily skewed towards the second half than in previous years”. Some $11 million has been deferred due to settlements delays in four major developments, but AV Jennings reckons “around $8.7 million” of that will be earned by the end of February.
It’s mainly blaming “purchaser confidence” but says that in turn is being fed by “sensationalist press commentary” about the outlook for residential markets, political uncertainty, and tighter lending conditions.
One notable factor was buyers being reluctant to commit to a new property until their current home had been sold.
Because of all that, AV Jennings says it isn’t expecting any material change in conditions until at least after NSW and Federal elections have been run and won.
There is some concern about where Federal tax policy will be heading in the lead-up and following the Federal election.
Stock was immediately down around 8 per cent this morning, and was around 6 per cent down at midday.