The developer smash continues with Devine reporting a first-half loss of $3.4 million, compared to a loss of $11.8 million that it posted for the first half of 2018. Revenue for the half came in at $15.1 million, compared to revenue of $24.3 million for the first half of 2018. Devine settled 133 land allotments in total. In advising its first half results, Devine noted it was seeking to renegotiate an important finance facility that is guaranteed by CIMIC, its majority shareholder. From The Australian:
Devine’s revenue slumped to $15.1m for the half, down from $24.3m in the first half of 2018, as it made fewer high-rise apartment settlements and sold off residual stock. It also made no englobo (lots of land capable of significant subdivision) settlements…
Devine said it had net assets of $90.2m at the end of June but current liabilities, including its senior bank multi-option facility balance, exceeded assets by $10.7m…
Devine has said it was also seeking to renegotiate a crucial finance facility that was guaranteed by its majority shareholder, CIMIC… The facility matures in March next year and does not contain covenants.
Devine warned that if it was not renegotiated, based on internal projections, the group “currently does not have the capacity to repay the facility in full at that time, nor does it currently have readily available alternative sources of liquidity”.
The latest HIA-CoreLogic land report recorded a sharp 16.2% decline in land sales in the year to September 2018, with the price of vacant lot hitting an obscene $279,949.
The fall in demand for new homes and the rise in land prices means the developer market is rigged to blow.