GEO to build at Ormeau

OCT 2010

LISTED developer GEO Property Group will develop a $43 million medium density project at Ormeau with 110 lots.

The 12.6ha property on Pascoe Road was bought by GEO in 1995 and has since been used as a nursery.

Following a net profit of $18.2m for FY10, GEO boss Guy Farrands has forecast modest ‘mid to high’ single digit growth next year.

He says slow DA approvals, density requirements and interest rates have impacted the industry adversely over the last two years, but prospects are positive.

“I’m continuously optimistic, but the market is not as strong. We still need to be careful despite reasonable buying opportunities in Queensland,” says Farrands.

Farrands says the company’s profit result underlined the strength of the business and reconfirmed the value of the group’s decision to focus exclusively on residential property development.

“We have remained focused on bringing quality product to the market and meeting the expectations of consumers looking for affordable homes in great areas,” he says.

“Our ability to deliver a record number of settlements with vastly reduced expenses further underlies the efficiency of the business and the potential for future earnings growth.”

The group’s reduced debt levels has created greater financial stability and provided the flexibility to undertake a re-stocking of its portfolio, including the acquisition of around 520 new lots over the last 12 months.

During FY10 the group achieved total settlements of 863 (2009: 711), including proportional share of JV sales, at an average gross margin of 20.9 per cent.