Land lease operator Ingenia Communities has informed the ASX that new home construction has been hit by continuing supply chain challenges, shortages of skilled labour and adverse weather.
“As a result of these conditions, FY22 settlements are now anticipated to be in the range of 400 to 425. The Group is targeting EBIT growth of 5% to 10% on FY21 and underlying EPS is anticipated to be 1-2 cents below FY21,” Ingenia said in a statement.
“Since announcing the Group’s results in February 2022, the impact of significant rain events in late February and March have led to further delays in key projects across Queensland and NSW, with homes scheduled for completion in Q4 FY22 now expected to settle in early FY23. The Group’s Queensland projects across Hervey Bay, Sunshine Coast, Logan and Gold Coast have experienced significant delays, with rainfall closing sites and limiting access.
“While the Group has been working closely with builders to accelerate works to mitigate supply chain and weather delays, the ability to manage project timelines has become limited by the lack of available labour. An industry wide shortage of key trades has materially impacted the Group’s projects, resulting in additional delays and greater uncertainty. These challenges are not anticipated to abate this financial year as the demand for key trades is further impacted by insurance work following severe storm and flood damage in South East Queensland and Northern New South Wales.”
This delays comes at a bad time for Ingenia as in the past 13 weeks its share price has dropped 20% from $6.00 to $4.80.
This is despite CEO Simon Owen stating demand for its land lease products “continues to be at record levels”.
Ingenia has sold 27 new homes with a further 460 homes having a deposit lodged or contracted.
“The average new home sales price and margins remain consistent with the first half and the Group continues to increase pricing of new home releases to maintain margins. Ingenia has a stable team of financially sound core builders and is working with them to respond to current conditions. The Group continues to target settlements to 1,800 – 2,000 over the three years to FY24.”
