Velocity Property Group Limited (ASX: VP7) is an Australian boutique property development company which is involved in the development of multi-unit apartments and mixed commercial developments. The company’s projects are high-end low to medium density residential and commercial mixed-use developments targeted at the high net-worth owner-occupier market segment, such as wealthy retirees looking to move from houses to apartments. Through its thoughtful design and distinctive projects, the company has created a special place for itself in the Property market.
The company generates income primarily from the construction and sale of low to medium density residential apartment developments, townhouses and single and double storey homes. Further, the company also generates income from its investment property portfolio, which includes both commercial and residential property.
The company’s focus is set on key markets in south-east Queensland, particularly Brisbane and the Gold Coast, where there are still favourable off market opportunities available. The company recently completed its signature ONE Burleigh Headland and ONE Palm Beach developments. Further, the company has also been granted development approval for a second Palm Beach site that was acquired last year.
In its quest for becoming a market leader in the development of luxury property, the company has made solid progress with its projects which includes ONE Palm Beach, The Hathaway and the Ellerslie Crescent houses at Taringa. All these projects are expected to be delivered in FY19.
In 2019 March, the company increased its Gold Coast presence by acquiring a development site in Burleigh Heads on the Gold Coast, Queensland. The Group's latest signature project at ONE Bulimba Riverfront continues to progress well with construction well advanced and on schedule for completion and initial sales in FY20. The company is also progressing with the construction of the Parque on Oxford townhouses and apartments with completion and initial sales expected in the first half of FY20.
For the half-year ended 31 December 2018, the company reported strong results with significant revenue and profit growth. For the half year period, the company reported revenues from ordinary activities of $27.31 million, up 29007% as compared to the previous corresponding period (pcp).
The company’s Net profit after tax (after providing for non-controlling interests) was $1.29 million, driven by initial settlements at The Hathaway and ONE Palm Beach. Further, the Cash received from settlement proceeds from completed developments at The Hathaway and ONE Palm Beach were used to repay the respective project finance facilities at these projects. During the half year period, the company achieved development margins across the portfolio of 19% on revenue and 23% return on costs (including marketing costs, which are expensed ahead of recognising revenue). At the end of half year period, the company had Net tangible assets per share of $0.0564, representing a growth of 23% on pcp. As at 31 December 2018, the company had current assets of around $72.18 million and total current liabilities of $47.56 million.
FY19 Focus (Source: Company Reports)
In FY19, the company is focussed on building its brand through the delivery of quality projects. Further, the company is planning to collaborate with partners to accelerate its growth and profitability.
VP7’s shares last traded at $0.028 with a market capitalization of circa $10.13 million as on 9 May 2019.