The AVJennings Ltd (ASX: AVJ) share price has opened lower today following the release of a FY19 market update to the ASX before market open this morning. AVJ shares had closed yesterday at the 60 cents per share level, but opened this morning at 55 cents a share before creeping back up to the 58 cent level at the time of writing, a fall of 4.17%
What did the update tell us?
Firstly, AVJennings confirmed that Profits before Tax (PBT) for the 2019 financial year will come in at approximately $23 million, which was below expectations and a substantial fall from the $45.1 million in PBT that the company posted for the 2018 financial year. The company stated that the result was "impacted by the deterioration of market conditions, particularly in Melbourne and Sydney".
However, the company remains bullish on the outlook for FY20, stating:
"The company expects an improved result for FY20. A continued improvement in market sentiment is anticipated moving forward. Market fundamentals remain supportive with continued economic and population growth, low interest rates expected to continue for some time and a stable employment environment."
AVJennings also noted the rising confidence in markets following the recent Federal election as well as the state elections in NSW and Victoria. In addition, the company also notes the positive effects of APRA removing the minimum 7% debt servicing threshold that was formerly required to be applied by retail banks when considering loan applications.
The company also stated that "determination of the final dividend will be considered by the Board at its August meeting", where a final report and 'further commentary' will also be released to the market.
The AVJennings share price has fallen just shy of 16% in the past 12 months.
