InvestingSouth East Queensland conditions improving, but South Australia soft: DevineSouth East Queensland conditions improving, but South Australia soft: Devine
The Brisbane-based residential developer Devine has announced a pre-tax profit of $5.6 million for the six months to 30 June, well up on the $6.9 million loss for the previous corresponding period.
Managing director David Keir said a turnaround had been achieved and that prospects were good.
“The company expects to deliver a full year result of $10 million to $11 million profit before tax,” Keir said.
“Residential market conditions are continuing to improve in the company’s key operational regions of South East Queensland and Victoria.”
The period was characterised by good trading performances across the company’s land development operations and an improved operational result from the homes business, the company notice advised.
Although they noted the South Australian residential market was "continuing to face challenges in a post-stimulus environment".
Its development operations and the constructions business reported:
Land settlements of 392 allotments, with 85% of the full year settlement forecast either settled or subject to contract
314 housing construction commencements, with 80% of the full year target already commenced or subject to contract
Apartment sales of 97 apartments; including the pre-public release success of Mode at Newstead and the closing out of Hamilton Harbour with only one apartment of the 660 developed to be sold.
Hamilton Harbour: only one apartment unsold
DoubleOne 3: now nearing 90% sold
Mode at Newstead: 70% sold or reserved prior to public releaseSale of the company’s 50% interest in the Parramatta apartment opportunity capitalising on the value uplift since acquisition
Practical completion of the Devine / Investec DoubleOne3 apartment development to enable settlements to occur from July 2014
Growth of the Devine Constructions work-in-hand to $179 million with the award of the Westmark Milton contract for Walker Corporation (277 apartments)
Cashflow surplus of $41.8 million for the six months, a strong improvement on the prior corresponding period.
Its majority shareholder Leighton Holdings has recently announced that it was seeking to sell its half shareholding in the company.
The ASX announcement advised during the period to June 2014 the company undertook and achieved the following outcomes:
Asset sales delivering more than $70 million to Devine were achieved as part of the capital recycling program with all assets sold at or above book value;
A detailed review of the Company’s business strategy and subsequent implementation of key outcomes;
Interest bearing debt reduction of $60 million resulting in a gearing level of 16% at June 30;
Accelerated trading levels across many of the Company’s projects;
No interim dividend has been declared.
