Tough economy hits Winton Land’s profits

Friday, 21 February 2025

The Burr Bar is one of the venues in Winton Land’s new Ayrburn hospitality precinct in Arrowtown.

Winton Land’s profits have taken a hit with a net loss after tax for the six months to December 31, and the company says the economic environment is to blame.

The high profile property development company announced a net loss after tax of $2 million in its half-year financial results released to the NZX on Friday.

In contrast, it reported a $9.7m net profit after tax over the same period last year.

Earnings before interest, tax, depreciation, and amortisation (Ebitda) were down to a loss of $0.1m from a $14.2m profit, while revenue fell 5.3% to $81.1m from $85.6m.

The company put the decrease in profitability down to a lower number of settlements, a fair value loss of $2.8m on investment properties from the revaluation of its commercial and retirement assets, and an increase in administrative expenses.

Winton Land’s results reflect the struggling economic environment, the company’s chief executive Chris Meehan says.

Winton chief executive Chris Meehan said the results “aren’t what we would have liked”.

They reflected the struggling economic environment and a year of lower product delivery in Winton’s residential development timeline, he said.

“But we have continued to operate with discipline, nurtured growth parts of the business in line with the revenue diversification strategy and avoided taking on significant new projects to protect the company from undue risk until we see clear evidence that the cycle is turning.

“We are navigating the recession as well as possible but most importantly, we are positioning the company optimally to benefit from an improving property cycle.”

Winton specialises in unlocking land to build master-planned neighbourhoods, such as Northlake in Wanaka, Longreach in Coromandel, Stillwater in Auckland, and large-scale development projects, such as The Marlborough in Auckland’s Hobsonville Point and the Hilton Hotel in Queenstown.

It has a retirement village subsidiary, Northbrook, which is working on five high-end developments, in Auckland’s Wynyard Quarter and Hobsonville Point, Wānaka, Arrowtown, and Christchurch.

It is also the owner of the new multi-venue Ayrburn hospitality precinct in Arrowtown.

Winton Land completed Jimmy’s Point, 30 high-end waterfront apartments at Launch Bay Hobsonville Point in Auckland.

The company finished the first half year with a pre-sale book of $342m, a landbank yield of about 6000 units, including 877 retirement living units, and cash holdings of $26.1m, it said.

Some significant residential projects had been completed. They included the 30 waterfront apartments that made up Jimmy’s Point at Launch Bay Hobsonville Point, the 20 townhouses that were Alta Villas at Northlake Wānaka, and Stage 3 at Lakeside Te Kauwhata.

Winton’s Sunfield neighourhood development in Auckland’s Papakura was on the initial fast-track project list and an application had been submitted, and work on Stage 1 of Northbrook Wānaka was on track in anticipation of residents moving into the village later this year, the results showed.

But the company had decided to delay its flagship Northbrook Wynyard Quarter “vertical luxury” village project by about a year to allow for construction costs and interest costs to moderate.

Meehan said the economic downturn had been more severe and had continued for longer than expected.

“We remain cautious and believe New Zealand isn’t yet at the bottom of the construction cycle. While interest rates have decreased, that is only one part of the economic levers stifling the economy.”

Unemployment continued to increase, and the company believed the property market was unlikely to substantially turn around until after unemployment had peaked, he said.

“While it will continue to remain challenging, we are confident in Winton’s financial position and strategy to weather the continued weakness in the economy and come out the other side very well positioned for the future.”