Like many property developers the past two financial periods, iconic builder AVJennings have experienced tough times.
It just shows that even you have one of the industries best chief executive’s, in Louis Milkovits, the marketplace can be a great leveller.
As previously reported in Australian Property Journal, AVJ has seen a number of profit downturns over the past two years thanks mostly to rising costs and government imposts, however, its revenue in a tougher market has remained relatively consistent.
As at 31 March, AVJ returned an after tax profit of $16.2 million down from $43.5 million in the previous corresponding period, however its 2006 revenue remained strong at $460.6 million compared to the $477 million of 2005.
Encouragingly for AVJ’s future its gearing remains relatively low at 29.9% with total assets at just under $600 million.
However, even more importantly is its land kitty built up over the past five years, which now sits at 8800.
At AVJ’s AGM yesterday, Mr. Milkovits not surprisingly said rising interest rates and state government taxes continue to burden the first and second home buyers market.
Mr. Milkovits pointed to the New South Wales residential market where it had seen rising building prices and government charges of up to $45,000 per lot pitted against price reductions of up to 10%.
He added that in the immediate term house prices on the eastern seaboard would not increase.
However, as Mr. Milkovits envisages further belt tightening for at least the immediate term, analysts see AVJennings as a company with a bright future.
Yesterday, AVJ closed unchanged at $1.06.
By Nelson Yap
