AEDAS Homes' gross margin is 29%, which is on the upper end of the estimated range
- The residential developer reported revenues worth €55.4 million thanks to the delivery of housing units and the sale of non-strategic land
- The gross margin of these transactions is €15.8 million
- These figures cement the developer as an attractive investment opportunity, unanimously backed by analysts' consensus
November 2018- AEDAS Homes, a leading developer in Spain's new real estate cycle, has increased its gross margin over its IPO forecast, according to the latest results. Between January and September 2018, the developer reported revenues of €55.4 million, with 86% coming from the delivery of housing units and 14% from the sale of non-strategic land. The gross margin for these transactions is €15.8 million or 29%, a figure on the upper end of the estimated range in the developer's October 2017 IPO prospectus. This means that the company has surpassed its gross margin target, which had been set at 22%.
These numbers cement the developer as an attractive investment option, which has been confirmed recently in statements released by analysts on the potential value of the company's share price following the publication of its third quarter results. In fact, the seven entities, which include Goldman Sachs, UBS and Banco Santander, unanimously have given AEDAS Homes a Buy rating.
AEDAS Homes will continue to maintain these margins in the coming months despite increasing construction costs across the sector. This is due the fact that sales prices for the developer's homes are rising more than construction costs, meaning that this variable will not affect its economic and profitability targets. Additionally, AEDAS Homes has launched several initiatives aimed at maintaining margins, such as forming strategic partnerships with contractors to encourage economies of scale and implementing industrialized, or pre-cast, solutions early in the design phases so as to reduce reliance on labor.
In terms of sales, as of October 31, the company had sold 1,852 units, with an estimated GDV of €648 million. By region, sales were very strong in the Center (29%), followed by the East and Balearic Islands (26%), and Catalonia (21%).
As of October 31, the company had 2,260 units under construction, out of a total 2,638 units with planning permission already secured (including completed units). In the past eight months, construction permit applications for an additional 3,009 units have been made, further improving the developer's visibility over its 2020 and 2021 delivery targets. It is worth noting that construction works on the Nou Eixample Mar development in Vilanova i la Geltrú (Barcelona) were extremely efficient and completed ahead of schedule, making it possible to move up the delivery of some units to the end of 2018, instead of in 2019 as planned.
About AEDAS Homes
The developer AEDAS Homes became a listed company on October 20, 2017, in Madrid, with a market capitalization of over €1.5 billion. AEDAS is an industry leader at the national level and plays 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 the highest-quality land bank in Spain, according to analysts, since most of this land is classified as ready-to-build. The company has a portfolio with more than 1.5 million square meters to build over 14,500 homes in the nation's key markets and their surrounding areas (both in terms of real estate and finance): the Center, Catalonia, the East and Balearic Islands, Andalusia and Costa del Sol.