Western Australia’s leading apartment development company, Finbar Group Limited (ASX: FRI), has weathered difficult trading conditions and delayed project delivery to post net profit after tax of $2.78 million for the financial year ended 30 June 2023, compared with $10.98 million the previous year.
In a year focused on the ongoing construction of major projects Civic Heart in South Perth, Aurora in Applecross, and The Point in Rivervale, Finbar’s apartment settlements were limited to several lots at its Dianella apartment project, which it has now sold out, and the recently completed AT238 tower in the Perth CBD. Construction delays at AT238 pushed anticipated settlement numbers from the first half of FY23 to the latter part of the financial year. Settlements from AT238 will continue in the current financial year.
Construction at Finbar’s flagship project – Civic Heart in South Perth – remains on track for completion in FY24, as does its high-value project Aurora in Applecross. Although both projects originally were scheduled for earlier completion, Finbar is likely to benefit from its ability to continue developments at a time its competitors have delayed and cancelled proposed projects.
It expects to complete apartments valued at about $680 million within the next 12-18 months into a market that has had limited supply for several years, record low residential vacancies and the potential for normalised interest rate conditions.
Finbar Managing Director, Darren Pateman, commented: “The company continues to face challenging trading conditions, with higher than forecast construction costs and sales dampened by the current cycle of rising interest rates.
“However, construction costs have begun to stabilise and there is increasing confidence that interest rates are nearing their peak.
“Finbar has approximately $680 million in project value under construction, expected to be delivered to market later this financial year and the first half of FY2025. Although apartment prices have not risen significantly in recent years, we are confident that the chronic shortage of accommodation in Perth, combined with population growth and interest rate stability, means our projects will be well received when they are delivered to the market.”
