Shares in home builder, AVJennings fell 1.4% yesterday after the company produced what amounts to an earnings downgrade for 2017-18 ahead of the release of the full year results later this month.
The company told the ASX yesterday morning that it it is looking for earnings to be down nearly 12% for the year to June 30 because it has been unable to justify bringing to book a $6 million profit from a deal done close to the end of the financial year.
Directors said yesterday “is anticipated that the FY18 financial result will be approximately $45 million Profit Before Tax (PBT).”
"Determination of the year-end result involved resolution of the timing, and not the certainty, of revenue recognition of a stage at Arcadian Hills, Cobbitty, New South Wales. The issues involved were complicated and required time to review and consider all the accounting and other requirements.
"After discussion with our external auditors, the decision has been made to exclude the item from the FY18 result. Consequently, the FY18 result excludes a positive PBT contribution of approximately $6.1m.
"Had the revenue and profit from this stage been recognised, the result would have been in line with the FY17 result of $51 million PBT.
"A final determination will be made when the full year-end accounts are available, however, it is anticipated that the total dividends for the year will be in line with FY17 at 5 cents per share.
AVJennings plans to release its full year results on August 17.
The shares ended down 1.4% at 68 cents yesterday. They are down 9% so far this year.