This article is from the Australian Property Journal archive
SHARES in builder Simonds Group declined by 6.58% after the company revealed an interim net loss of $2.2 million.
The company’s pro-forma result was a net profit of $4.4 million. The statutory revenue was $318.2 million and EBITDA loss of $0.4 million. The pro-forma revenue was $294.3 million and EBITDA was $8.9 million.
The company’s share price declined by 6.58% or 2.5 cents to close at 35.5 cents yesterday, well below the 52-week high price of $1.675.
The share price is only marginally higher than the 52-week low of 33 cents recorded on February 12.
Simonds listed in 15 months ago and issued shares at $1.78 each in its IPO giving it a market cap of $269.51 million.
As at February 25, the market cap was $51.06 million.
Acting CEO Robert Stubbs said the results were impacted by a number of factors affecting both the Simonds Homes and Builders Academy Australia businesses, but most notably by the performance of the Madisson Projects division which is now in the process of an orderly closure.
“With these factors now largely behind us, the company expects a material improvement in the second half of FY2016,” he forecast.
“Simonds Homes Australia’s stated expansion plans in Queensland, NSW, and South Australia is driving revenue growth with a 112 display homes open with a strong emphasis on these regions.
“However, the increased costs associated with this expansion, some delays in display home openings and increased competitive activity have had an adverse effect on profitability during the first half. In addition, the deferral in some titled land in metro and country Victoria have reduced the growth in site starts,” he added.
The Simonds Homes Australia (excluding the Madisson Projects division) recorded pro-forma revenue of $281.7 – up 9.1%. SHA pro-forma EBITDA was $5.7m – down 50.2%.
Stubbs said gross margin pressures associated with strong competitive activity in Victoria negatively impacted overall profitability, however price increases implemented in the half will begin to flow through during 2H16. In addition, operating margins during the first half were reduced as a result of the increased costs in relation to SHA’s expansion into Queensland and NSW.
The Builders Academy Australia (BAA) business recorded revenue of $11.6m – up 6.2%. The EBITDA result was $4.0m – down 20.6%.
Simonds recently appointed former Becton boss Matthew Chun as CEO. He will take over on April 01.
Australian Property Journal
