THE URBAN DEVELOPER
Homebuilder Simonds Group has posted its revenue for the year citing subdued market conditions in 2019, and the restricted lending environment as impacting its earnings prior to the pandemic challenges.
Simonds’ revenue was down 3.3 per cent to $664.8 million—after reporting $687.7 million in the previous fiscal year, attributing the decline to lower site start numbers.
The company’s financials come as executive director Mark Simonds, son of Simonds founder Gary Simonds, and his family were placed into a two-week hotel quarantine on the Gold Coast last Wednesday after boarding their super-yacht and making unauthorised stops while sailing up Australia’s east coast from Victoria to Queensland.
The group now face criminal investigations into the reported breach of NSW and Queensland border restrictions.
One of Australia’s largest homebuilders, Simonds Group listed on the ASX in 2014.
Simonds reported 185 fewer site starts for the year to June, citing subdued market conditions in 2019 and the challenges of Covid-19 as the pandemic rocks the sector.
Site starts were down 7.2 per cent to 2395 from 2580 in the 2019 tax year.
Simonds joint chief executive Kelvin Ryan said the group remains focused on delivering sustainable operating performance amid the challenging year and Melbourne’s current stage four restrictions.
“The significant downturn in the market, which started in early 2019, was further exacerbated by more restrictive lending conditions and flowed through to impact our fiscal year 2020 starts,” Ryan said.
“The market was showing signs of recovery in early 2020 but the burgeoning Covid-19 pandemic and national lockdown in March impacted our business during April and May.”
Simonds posted a $7.1 million net profit from operations after tax, down from $11.7 million in fiscal 2019.
The Group’s net assets increased from $11.4 million at 30 June 2019 to $17.3 million at 30 June this year, which it says reflects the positive earnings contribution and working capital management.
Ryan said that stage four restrictions currently in place are increasing the construction time on homes, and had reduced visits to its display homes.
“The covid-19 pandemic continues to impact our business in fiscal year 2021,” Ryan said.
Simonds, which has operations in New South Wales, Queensland and South Australia, said that it had taken a range of actions to reduce the impact of the restrictions on its operations.
The ASX-listed homebuilder is one of the largest detached homebuilders in Victoria, and has been in operation since 1949 when it was established by Gary Simonds.
Despite the group’s strong operational cash flow, the directors announced that no dividend would be declared for the year to June 2020 due to the uncertainty of the pandemic.
Source: 31 August 2020 – https://theurbandeveloper.com/articles/simonds-homebuilding-construction-starts-down