AEDAS Homes increases its gross margin on works in progress by 19%
- The company reported a gross margin of €208.1 million, compared to its target of €174.7 million
- Rising home prices have comfortably offset construction cost inflation
- The AEDAS Homes GAV stands at €1.608 billion, 17.3% higher than at IPO
October 2018- AEDAS Homes, a leading developer in the new real estate cycle in Spain, registered a gross margin of €208.1 million on August 31, 2018, 19% higher than the forecasted €174.7 million, on the 1,862 homes currently under construction, including 222 to be delivered this year.
Despite increases in construction costs, the publicly listed company has not felt the negative effects of cost inflation on its financial and profit targets, as cost inflation has been comfortably offset by an accompanying rise in homes prices.
AEDAS Homes has also launched several initiatives aimed at preserving or increasing margins, such as forming alliances with strategic partners in the construction industry to support economies of scale, and implementing industrialized solutions in the design phase so as to reduce contractors' reliance on labor.
The publicly traded company recorded its first profit in the first half of 2018: it had a net income of €3.7 million thanks to €14.7 million in total revenue, to which €11.9 million was added in the form of tax credits. The generated revenue came from the delivery of the company's first homes (€7.2 million) and the sale of non-strategic land (€7.5 million). The gross margin on these transactions was 28.6%, a high level of profitability that confirms AEDAS Homes as an attractive investment opportunity.
Additionally, the consulting firm Savills performed a new valuation of the developer on June 30, 2018, with the AEDAS Homes GAV standing at €1.608 billion, which is 17.3% higher than at IPO, with assets worth €1.370 billion. As for the NAV, it reached €1.516 billion, which translates into €31.60 per share or a 1% growth since FY 2017.
AEDAS Homes, currently in the ramp-up stage, will be launching 3,000 new homes annually by 2020, and delivering 3,000 each year to its customers by 2022.
About AEDAS Homes
The developer AEDAS Homes became a listed company on 20 October 2017 in Madrid, with a market capitalization of over 1.5 billion euros. AEDAS is an industry leader at the national level and aims to play an important role in the new cycle of the Spanish real estate sector, which must be marked by professionalism and an adherence to rigorous standards.
AEDAS Homes has a fully permitted residential landbank with more than 1.5 million buildable square metres (the highest quality landbank in Spain, according to analysts). This will permit the development of 14,500 residential units in the key markets, and their surrounding areas (both in terms of real estate and finance) where AEDAS operates: Centre, Catalonia, the East & Mallorca, Andalucía y Costa del Sol.
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