AVJennings (AVJ) H1 2025 earnings summary

Executive summary

• Revenue increased 9.1% year-over-year to AUD 131.4 million, driven by a 20% rise in lot and apartment settlements.

• Gross margin declined to 22.2% from 25.8% due to product mix, cost escalation, and capital recycling.

• Profit before tax fell 14.3% to AUD 3.6 million; EPS dropped 29.5% to 0.43 cents.

• 325 settlements completed, up from 270 in 1H24; presales dropped to AUD 62 million from AUD 159 million.

• No interim dividend declared due to ongoing due diligence for potential acquisition offers.

Financial highlights

• Revenue: AUD 131.4 million (up 9.1% year-over-year).

• Gross margin: 22.2% (down from 25.8%); gross margin value AUD 29.2 million (down 6.1%).

• Profit before tax: AUD 3.6 million (down 14.3% year-over-year); net profit after tax AUD 2.4 million.

• Net cash from operating activities improved significantly, reaching AUD 2.0 million, a AUD 107.6 million improvement from 1H24.

• Gearing at 24.5%, within the 15–35% target range; cash at bank AUD 9.9 million; borrowings AUD 218.3 million.

Outlook and guidance

• Revenue and earnings are expected to be materially skewed to the second half of FY25.

• Gross margins anticipated to remain lower due to continued apartment and built-form housing mix.

• Queensland and South Australia expected to outperform; NSW, Victoria, and NZ face affordability constraints.

• Interest rate cuts in Australia and NZ anticipated to boost buyer sentiment.

• Three new projects to commence in the next 12 months, enhancing future earnings visibility.