An Australian boutique property development company, Velocity Property Group Limited (ASX: VP7) is known for its innovation, cutting-edge design and uncompromising quality in creating multi-unit developments specifically targeted for the owner-occupier, empty-nester market and mixed use/ commercial developments. With an experienced management team and a compelling value proposition, the group is on the verge of becoming a leading property development company in Australia. Velocity Property Group is currently targeting the key markets in South East Queensland, particularly the Gold Coast and Brisbane.
Velocity’s developments are focused on the quality of design and branding. The apartments structured by the company are generally larger than others in a similar market and are designed as open plan spaces with negligible passageways so that the apartment buyers get more liveable spaces, relative to smaller higher density apartment developments.
In the recent past, the company made solid progress with the acquisition of development site in Burleigh Heads on the Gold Coast, alongside completion of its signature ONE Burleigh Headland and ONE Palm Beach development.
As far as financial performance is concerned, the company reported a robust financial performance during the first half of FY19. For the half-year ended 31st December 2018, (H1 FY19), the group reported revenues of $27.31 million, which was 29,007% higher than the previous corresponding period (pcp). Furthermore, the group generated a profit (attributable to the owners of Velocity Property Group) of $1.29 million in H1 FY19, which was 205% higher than pcp. The group’s net tangible assets per share increased to $0.0564 as compared to $0.0458 in 2017, representing a growth of 23%. The strong set of results for the half-year period was primarily driven on the back of initial settlements at The Hathaway and ONE Palm Beach.
H1 FY19 Results (Source: Company Reports)
Through the sale of properties, the company reported total revenues of around $27.05 million in the first half. It is expected that in the second half, the company will further yield revenues through sales at The Hathaway and ONE Palm Beach. In addition, the company is also anticipated to witness initial sales at the Ellerslie Crescent Residences (construction already progressed), in the H2FY19.
In February 2019, at the time of its half-year results release, the company had already completed 80% of settlements at Hathaway project. Further, the company also completed 41% of settlements at ONE Palm Beach.
The group intends to use the combination of senior debt secured by development sites and other debt facilities for additional funding for the construction of the current projects and future site acquisition(s). In November 2018, the company refinanced the existing debt facilities related to its ONE Bulimba Riverfront and Parque on Oxford Developments, signifying the positive views of the lenders for both the developments they have funded and the company’s future pipeline.
In the first half of FY19, the company used $37,045,860 of cash for repayment of borrowings. At the end of calendar year 2019, the company had current assets of $72.18 million with current liabilities of $47.557 million. Cash and cash equivalents at the end of the financial half-year were $5.384 million.
VP7’s shares last traded at A$0.030, with a market capitalisation of circa A$10.86 million as on 23rd May 2019.
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