This article is from the Australian Property Journal archive
Lower settlements and New Zealand’s economic downturn have dealt a blow to dual listed masterplanned communities developer Winton.
Winton announced a first half year net loss after tax of $2.0 million compared to a NPAT of $9.7 million in the previous corresponding year. Earnings before interest, tax, depreciation, and amortisation (EBITDA) decreased to a loss of $0.1 million from $14.2 million profit.
Chair and CEO Chris Meehan said the decrease in profitability reflects the lower number of settlements, a $2.8 million investment properties fair value loss in H1 FY25 compared to a $2.6 million gain in H1 FY24, a $3.6 million increase in administrative expenses reflecting a full six months of administration expenses from the establishment and operation of Ayrbur.
Overall revenue declined by 5.3% to $81.1 million, with 90 units settled, down 68 units from 158 in the pcp.
“These results reflect the struggling economic environment and a year of lower product delivery in Winton’s residential development timeline.
“While the overall results aren’t what we would have liked, we have continued to operate with discipline, nurtured growth parts of the business in line with the revenue diversification strategy and avoided taking on significant new projects to protect the company from undue risk until we see clear evidence that the cycle is turning. We are navigating the recession as well as possible but most importantly, we are positioning the company optimally to benefit from an improving property cycle,” he added.
Winton finished the six-month period with a pre-sale book of $342.0 million as at 31 December 2024, a landbank yield of c6,000 units, including 877 retirement living units and cash holdings of $26.1 million.
Meehan said while tough continues remain, he added that Winton’s financial position and strategy to weather the continued weakness in the economy and is well placed to come out the other side.
“We remain cautious and believe New Zealand isn’t yet at the bottom of the construction cycle. While interest rates have decreased, that is only one part of the economic levers stifling the economy. Unemployment continues to increase, and we maintain our view that the property market is unlikely to substantially turn around until after unemployment has peaked.
“The economic downturn is more severe than expected and has continued for longer. A change in government was anticipated to be a catalyst to get the economy moving again and out of recession, however, it is taking more time than was generally expected,” he said.
