Devine changes focus, profit slumps
Devine Limited (DVN) saw its profit slump 89.5% to $1.2 million for the six months to 31 December 2009. The result came despite a 53% surge in revenue to a tick over $300 million.
The property developer said its underlying operating profit after tax climbed from $11.6 million to $14.4 million, however the final result came on the back of $13.2 million in one-off charges to the company.
The charges came after the company abandoned its planned large-scale and commercial development projects, such as its ‘French Quarter’ development in Brisbane.
“This result is a strong vindication of the board’s decision to reduce our exposure to the commercial sector and focus our efforts on high and medium-density residential projects,” Acting CEO Viv Grayson said.
Looking ahead, Devine said there was a growing deficit in housing stock, tight land supply and low interest rates.
”Devine is well positioned to capitalise on these market and economic settings,” the company said.
The risk remained, however, of the Reserve Bank of Australia raising interest rates.
The company said its underlying profit after tax was expected to jump around 20% to 25% to $16.7 million, with no impairment charges expected in the second half of the year.
Looking at the company’s results, profits for the Housing and Land Division were up 162% from the previous corresponding period.
Meanwhile, land sales were up 43% to 968 lots.
At 1114 AEDT, Devine shares were up 0.5c to 41c.
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