Built a strong pipeline: Villa World Ltd (ASX: VLW) reported their underlying gross margin to 27.3% for FY17, exceeding their forecasted range of 24%-26%, driven by improving sales prices and cost savings. The group’s ventures delivered $5.4 million in fee income and share of profit during the year from $4.6 million in pcp, again exceeding their forecasts of $3.4 million driven by sales and settlements at the Rochedale joint venture project. Projects at various points in the lifecycle led to 1,207 sales during FY17, up from 1,185 in pcp. VLW released eight new projects for sale mostly in the second half of 2017 and aims to start selling of nine projects in mid FY18 across key growth corridors of northern Brisbane, Logan, north and north-east Melbourne and south-east Melbourne. This comprises their major products like The Meadows (Strathpine), Chambers Ridge (Park Ridge), Covella (Greenbank), Wollert and Clyde. The group is planning more than 15 major projects selling during FY18, and accordingly, is targeting to achieve at least 1400 sales. The group is carefully choosing acquiring projects for beyond FY19 pipeline and forecasts a cash outflow for acquisitions of $110 million to $130 million in FY18 funded from existing debt facilities and working capital and $45 million in capital lite transactions.
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