What: Queensland-based house and land property developer Villa World Ltd (ASX: VLW) is benefitting from the buoyant housing market in Australia.
According to its just released full year results announcement the company's revenues soared 40% to $321.6 million and net profit before tax jumped to $29.4 million – a result which exceeds the guidance it provided to the market in May.
So What: Villa World's share price is relatively flat over the past year, although the stock is trading at $2.26 which is near its 52-week high. On an earnings per share basis, profits came to 25.6 cents per share (cps) implying a price-to-earnings (PE) ratio of 8.8x. That appears an appealing multiple in its own right however as the guidance below shows, if one strikes a PE based on forward guidance the ratio become significantly more appealing again.
It's also worth noting that the company is backed by $2 per share in net tangible assets.
Now What: Shareholders can expect to receive a fully franked dividend of 10 cents per share (cps) which brings total dividends for the year to 16 cps. The stock will trade ex-dividend on September 1, with payment due on September 30. The board has confirmed that it expects to pay a dividend in 2016 at least in line with the 16 cps paid in 2015.
At the current share price this implies a dividend yield of 7.1%.
Most importantly however, the positive momentum is set to continue…
There were 364 sales contracts carried forward into the current financial year and impressively, management has provided guidance for the current 2016 financial year for profit before tax to come in at $40.5 million, which would represent a big upswing on the 2015 result.
