Avjennings Ltd (ASX:AVJ, SGX:A05) CEO Philip Kearns emphasizes the company's distinction from contract builders by focusing on developing its own land or land within joint ventures, ensuring the homes built are of AVJennings' design.
Kearns told Proactive's Jonathan Jackson that the company outsources its trades but maintains quality through rigorous supervision. This approach, according to Kearns, is foundational to AVJennings' reputation for creating quality communities and homes trusted by generations, some of whom have lived in their AVJennings homes for over 50 years. The emphasis on quality construction and thoughtful design, aimed primarily at homeowners rather than investors, has contributed significantly to the brand's standing, evidenced by its ranking as the third most trusted brand in Australia in a 2021 Reader's Digest survey.
Kearns highlighted the recent challenges in the building industry, including labour shortages and rising costs, which have made it difficult for many developments to proceed. Despite these obstacles, AVJennings has managed to navigate the uncertainties by being prudent and frugal with capital management. The company has leveraged its flexibility in managing land development pace to adapt to market demands and interest rate fluctuations.
Looking ahead, AVJennings aims to stabilize the business amidst ongoing market challenges, including interest rate uncertainty and labour issues, with a long-term view towards 2025-2027. Kearns outlines a strategy focused on weathering the current storm and setting a solid foundation for future growth, underscoring the company's long-term planning and resilience in facing industry cycles.