AVJennings (ASX: $AVJ) has released its 1H FY24 financial results, reporting a 14% decrease in revenue to $120m compared to the prior corresponding period (PCP). The gross margin also decreased by 9 percentage points to 26%, with 294 contract signings showing a significant 75% increase on the PCP. The company's profit before tax stood at $4.2m, reflecting an 81% decline from the PCP. AVJennings also highlighted a lower settlement volume but increased value contribution from built-form products, along with the impact of cost pressures on gross margin, particularly in Victoria.
AVJennings is executing its strategy of developing sustainable communities for a modernized future. The company is focusing on upgrading its financial and operating systems, along with the capital structure. Initiatives are also in place to enhance people, leadership, and organizational values to deliver AVJ's strategy. The Pro9 investment is expected to bring considerable time savings, reduced onsite trade visits, improved energy efficiency of homes, and enhanced sustainability positioning in the market. AVJennings is optimistic about the potential of the Pro9 JV to redefine its earnings and growth profile in the future.
AVJennings' 1H FY24 financial results reflect a challenging period with lower settlement volumes and decreased profit before tax. The company is maintaining a prudent capital management approach, focusing on capital conservation given ongoing market uncertainty. The strategy update emphasizes the modernization of financial and operating systems, capital structure, and people initiatives. AVJennings is diversifying its net funds employed allocation and is optimistic about the potential of the Pro9 investment to drive future growth. Looking ahead, the company anticipates a significant skew for settlements and earnings in the second half of FY24, with a focus on executing its strategy and providing a Q3 trading update in April 2024.