This article is from the Australian Property Journal archive
AUSTRALIA’S seventh-largest home builder, Simonds Group, posted a larger full-year loss in FY23 as it felt the effects of bad weather, inflation, and labour shortages, but is holding a positive outlook.
Simonds posted an $23.3 million full-year post-tax loss, down from the $9.7 million loss of FY22.
“NPAT is down predominantly due to a wide range of external factors such as impacts of prolonged weather events (1H), continued inflationary pressures of supply and trade labour shortages across the industry, that had limited ability to be recouped in a fixed price contract environment,” the group said.
“These impacts started to moderate in the second half as jobs on site declined across the industry and site starts margins are increasing as newer, higher margin jobs go to site.”
Revenue lifted 5.1% from $687.5 million to $722.4 million.
Simonds recorded 1,951 site starts, down by 425 starts on the previous year primarily due to subdued retail demand and increased cancellations fuelled by higher interest rates and cost of living pressure.
CEO and executive chairman, Rhett Simonds said the group remains in a “strong financial position with healthy liquidity and a positive outlook ahead”.
“Build times and productivity continue to improve as the supply chain challenges ease and industry moves past peak construction.
“The equity raised during the year, coupled with the strategic initiatives to diversify channels to market and reduce overheads have created a solid foundation for the group.
“The higher interest rate environment and cost of living pressure will continue to impact residential customers in the near term.”
Simonds raised $25.5 million in December, while in April it executed a “significant” cost reduction exercise, “re-aligning the employee base and overheads”.
Simonds said it has developed and invested in a diversified strategy that provides alternative and counter cyclical channels to market, which includes the commencement of completion and rectification works on 300 homes left in the lurch by the collapse of major builder Porter Davis.
The group has a net cash position of $15.1 million and has no debt.
It is not paying a dividend for FY23.
