Transcription of Finance News Network Interview with Villa World Limited (ASX:VLW) Managing Director and CEO, Craig Treasure John Treadgold: Villa World Limited
(ASX:VLW) develops and sells residential property, offering ready-made house and land packages, as well as land ready for development in Queensland, Victoria and NSW. And joining me today at the ASX Investor Series in Sydney is the Company’s Managing Director and CEO, Craig Treasure. Craig welcome.
Craig Treasure: Thank you, thank you for having us.
John Treadgold: Villa World delivered a strong result in FY2014 with property sales and earnings per share pushing higher. Can you give us a snapshot of the results and the main drivers?
Craig Treasure: Yes certainly, in that financial year Villa World recorded a really strong result of 829 sales, delivering a profit after tax of $19.1 million, which was a great result for the Group. We were the beneficiary of large improvement in the property market.
John Treadgold: And what makes Villa World’s offering different from other property developers?
Craig Treasure: We are distinctly different than a number of our counterparts. The business is both a house builder and a land subdivider, and our housing business is profitable. We’re what you call a wholesale builder and we provide complete communities for our customers, where we build out the entire street. We also develop land and we do that in the three eastern States.
John Treadgold: What’s your strategy for continuing this success?
Craig Treasure: Villa World has a strong broad base of customers. So we sell to first homebuyers, second homebuyers and investors. We also get a lot of people who are downsizing where the kids have moved out of home, and they’re looking for a smaller home. So we’ve got a broad sales platform and our market is the beneficiary of low interest rates, improved consumer confidence and first homebuyer grants. So we’ve got a lot of strong factors in the market that are driving increased performance, within the Villa World business.
John Treadgold: That’s right; the residential property sector has enjoyed a very good couple of years. What could impact the sector going forward?
Craig Treasure: There’s a lot of talk in the press around measures that the Reserve Bank or regulatory sector may introduce. That’ll probably be targeted more at off-shore investors and should have little impact on our business. We produce everyday affordable residential product that is in the mid to low markets, and most of our product is in the sub $500,000 price point. And that’s a very resilient part of the property market. So we’re seeing pretty clear forward positive momentum, in our sector of the market.
John Treadgold: Finally, what’s your long term ambition for Villa World?
Craig Treasure: I think Villa World’s been listed on the ASX for 27 years. Nearly 36,000 Australians live in a Villa World home and we’ve been producing homes for people, at all stages of their life for that period of time. So our forward business strategy is to continue to do that in a low risk model, in the property space. We have strong cash flows, conservative gearing, at the yearend it was under 20 per cent and we can manage this business through property cycles quite well. So it’s continued steady growth, we’re providing a yield to shareholders at the moment in excess of eight per cent fully franked. And we intend to continue to provide good returns to shareholders, as we manage the business forward.
John Treadgold: Thank you Craig Treasure for the update from Villa World.
Craig Treasure: Thanks very much, it’s been a pleasure to inform people about Villa World.
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