Call for new strategy
Avant Homes progresses following rebrand
Colin Lewis, chief executive is also looking to hit revenue of £500 million as it positions itself as a dominant player in Scotland and the north of England.
Unveiling record results, he also urged the government to stimulate growth outside the south east.
He said: “From a market perspective, whatever the outcome of the forthcoming General Election, the Government should look to seize the opportunity of a new electoral mandate to set out its fresh thinking on how best to support the UK housing market.
“This includes a clear policy agenda to support the continued growth of the housing market outside of the South East, and indicating what support, if any, it plans to give home buyers after the Help to Buy scheme closes in 2021.”
Following investment from Alchemy Special Opportunities, Avenue Capital and Angelo Gordon in December 2014, the twelve-month period to the 30th April 2017 marked the second financial year under new ownership and its first year under the unified Avant brand, which was created in October 2015 as part of a strategy to transform the business.
Following a strong first half performance, Avant has maintained its growth momentum over the course of the second half of the year, delivering a record year of volumes, revenues and profits.
Total completions for the year ended 30t April 2017 were up significantly (35%) on the prior year at 1,636 (FY16: 1,210), with a strong increase in private completions of 31% to 1,406 (FY16: 1,074)
The group’s private average selling price increased to £242,000 (FY16: £224,000).
Following a record autumn selling season in the first half of the financial year, the spring selling season adopted a similar pattern, with visitor levels and reservation rates outperforming the same period in FY16. Total private reservations in the year were up 57% which translates to 0.81 sales per site per week (FY16: 0.65) across an average of 35 selling sites, compared to 28 in FY16.
Customer enquiries, visitors and reservations have remained strong during the early part of 2017 and the Group is well positioned as it starts its new financial year with 75% of H1 units forward sold.
Avant’s owned and contracted land supply now stands at over 6,700 plots with a potential gross development value of £1.6bn. This represents an increase of 1,100 plots across the year, which has been delivered through adopting a selective approach to land acquisition, focusing on premium locations in the north of England and central belt of Scotland.
Strategic land is a key element of Avant’s land programme and during the year Avant has focused heavily on converting sites from option to active sales outlet. The group have successfully pulled through 900 plots (35%) from our strategic land supply in the year. Avant will continue to invest in order to replenish its strategic land pipeline, which currently includes options held over 3,900 plots.
The company said there had been early signs of by declining consumer confidence since the start of the year and increasing inflation following the devaluation of sterling, but the underlying picture of the UK housing market remains sound.
In its statement, the company said: “While it is still too early to predict what stance the next UK Government will adopt in terms of housing policies, we remain confident that the supportive stance of recent years will be maintained.
“Recent industry data suggests that large regional cities in the Midlands, Scotland and Northern England continued to lead the rest of the UK in registering positive and sustained levels of house price growth during the first quarter of the year and it is crucial that this momentum is not lost.
“This requires a coordinated approach to both housing policy and economic strategy, including investment in infrastructure and financial support to regional initiatives.
“We would also call on the new Government to clarify their plans for supporting new home buyers after the current Help to Buy scheme closes in 2021. We believe greater clarity will provide buyers with increased confidence that will feed through into a more stable market environment as the Help to Buy end date approaches in the next Parliament.”
The company said it enters the new financial year with “good visibility thanks to a strong level of forward private reservations and, with a continuation of market conditions,”
The board is confident of building upon the positive performance in the year to 30th April 2017 over the course of the new financial year.
- Trading performance expected to result in record revenues, profits and land investment as the group continues to benefit from outlet growth, capacity and geographic concentration
- Revenues over the twelve-month period up 44% to £368m, driven by strong growth in completions and the continuing upward shift in private average selling price (“ASP”)
- 1,636 total completions, up 35% compared with the prior year (FY16: 1,210)
- Underlying private ASP1 of £252k (FY16: £242k), ahead of our waypost of £250k, primarily driven by site and unit mix improvements
- Sales per site per week of 0.81 over the twelve-month period (FY16: 0.65), a record for the group.
- Continued progress developing the Group’s land supply adding 1,100 plots to the owned and contracted land pipeline which now stands at 6,700 plots
- Strategic land pull through of 900 plots in the year (35%) with a further 3,900 plots held under option
- Significant growth in scale across the year with outlets at the end of the year up 62.5% at 52 compared to 32 outlets in April 2016
- Strong forward order book with 75% of H1 volumes already secured providing a good foundation for further growth in FY18