AVJennings (AVJ) H2 2024 earnings summary

Executive summary

• Revenue increased 12% year-over-year to AUD 319.7 million, driven by a higher share of built-form product despite lower settlement volumes and margin compression.

• Gross margin declined 18% to AUD 74.3 million due to higher costs and a shift to more built-form products.

• Normalized profit before tax fell 44% to AUD 19.4 million, excluding the Roxburgh project option termination; reported PBT was AUD 1.6 million after a AUD 17.8 million write-off.

• No dividend paid for FY24 as the board maintains a cautious capital management approach, with a return to normal dividend cycle expected in FY25.

• Strategic achievements included capital recycling, divestments, a successful AUD 30 million equity raise, and investment in Pro9 prefabricated solutions.

Financial highlights

• Revenue: AUD 319.7 million, up 12% year-over-year.

• Gross margin: AUD 74.3 million, down 18% year-over-year; margin declined to 23.2% due to cost pressures.

• Normalized PBT: AUD 19.4 million, down 44% year-over-year.

• Gearing increased to 23.9%, within the 15%-35% target range.

• Weighted average cost of debt rose to 7.8%.

Outlook and guidance

• FY25 revenue expected to be similar to FY24, with continued gross margin pressure until macro conditions improve.

• Earnings expected to be second-half weighted, with increased built-form product.

• Return to normal dividend cycle anticipated in 2025.

• Pro9 factory not expected to materially contribute until FY26.

• SE Queensland and SA to remain strongest markets; NZ sentiment to improve as rates fall.