ABN Group posts $7.5 million profit

ABN Group has recorded a $7.5 million profit, marking the homebuilder’s return to the black after a significant loss last year.

The Dale Alcock-led company today filed its FY23 results with the Australian Securities and Investments Commission, which represent a $56 million turnaround on last year.

In FY22, ABN Group reported a $42.5 million loss, which it has since restated to $49.09 million after changing its accounting policy on calculating commissions.

Its revenue was up 18 per cent on FY22, at $1.42 billion, and net tangible assets were up 6.5 per cent to $115 million.

Its recovery followed a year defined by difficulties for the building industry, including cost escalations, supply chain issues and labour shortages.

ABN Group managing director Dale Alcock said though the company continued to face challenges, its disciplined approach helped it move into a profitable position.

“We’re not immune from the pressures that have been around the industry nationally, and they continue,” he told Business News.  

“[We had] a disciplined approach all the way through, from stimulus activity, [and] where we see ourselves now is there is still a strong demand in Western Australia and Victoria.”

ABN Group chief executive Andrew Roberts added that the homebuilder expected to continue its profitable run into the future.

“We were very proactive, responsible and highly disciplined around the decisions we made relative to overheads, to costs in construction, to where we spent our capital, and that’s put us in really good stead for FY24 and beyond,” he said.

“[FY22] was our only loss, and we expect that to remain.

“We have had a very profitable first quarter … [and] … we’re positive that we will have an improved position in our profit for FY24.”

ABN Group moved to the top of the Housing Industry Association’s list of WA homebuilders, with 1,717 build starts in WA in FY23, up from 1,697 last year.

It lifted its dwelling starts in Victoria from 1,696 to 1,789.

ABN Group completed more than 3,400 homes in FY23, up from 3,300 last year.

Mr Roberts said he expected completion times to speed up into next year, as pressure on the finishing trades eased.

ABN Group is the dominant builder in WA this year, following BGC Housing Group’s cessation of new home sales in 2022.

When asked about the impact of BGC’s lack of new activity on ABN, Mr Alcock said the company remained focused on its own goals.

“And really, we [have] become a pretty reasonable flight to safety for consumers, considering [a new home is] the biggest investment of most people’s lives, so we’ve got to respect that and maintain that focus on customer delivery being our priority,” he said.

ABN Group limited the amount of new home sales it made in FY23, in a bid to work within its capabilities.

Mr Alcock said labour shortages were still the main challenge facing the sector, particularly for WA given competition for workers from the mining sector.

“Those issues remain that in various parts of the delivery pipeline, you’ve got that tightness of labour, and that will remain,” he said. 

“[It] all circles back to what’s our capacity and [working] within that capacity.”  

ABN Group’s cash on hand was $68.13 million in FY23, up 11 per cent on the prior corresponding period.

The company also paid down its bank facility at the end of July, meaning it has more than $30 million of cash reserves.

ABN Group’s staffing costs decreased from $214.79 million in FY22 to $199.43 million in the recent financial year.

The group said its 7 per cent reduction in staffing costs was in part due to its strategy to adopt a franchisee model in its mortgage broking business Resolve Finance, and a number of its fixed term contracts coming to an end.

ABN Group has 1,944 staff on its books in FY23, compared with 1,911 last financial year.