Rising Costs and Land Prices Pose Challenges Despite Simonds’ Growth

Strong Half-Year Financial Performance

Simonds Group Limited has delivered a solid set of results for the first half of fiscal year 2026, with revenue climbing 14% to $362.8 million and EBITDA rising to $17.9 million. This growth was underpinned by a 23% increase in site starts, reaching 904, driven by the successful integration of the Dennis Family Homes acquisition and the maturation of alternative sales channels. The Victorian residential market’s improving affordability and government incentives for first home buyers also contributed to the positive momentum.

Strategic Geographic Expansion

In a notable strategic move, Simonds has signed a 50/50 joint venture agreement to enter the Western Australia residential construction market. This expansion supports the company’s ambition to become a truly national builder and taps into a growing market with strong demand for affordable housing. The investment in WA is expected to contribute meaningfully to future profitability and diversify Simonds’ geographic footprint.

Operational and Product Innovation

Simonds is actively investing in operational transformation, including upgrading delivery platforms and embedding AI capabilities to enhance efficiency and customer experience. The company is also innovating its product range, particularly in medium-density housing, to meet evolving customer demands and support development on smaller lots. New interactive gallery experiences and AI-driven front-end tools are nearing completion, aiming to accelerate customer engagement and conversion rates.

Financial Position and Liquidity

Liquidity remains robust at $43.8 million, providing a strong foundation to fund ongoing growth initiatives. While operating expenses increased due to investments in resources and expanded display networks, these are aligned with the company’s growth strategy. Cash flow from operations remains healthy, despite higher capital expenditure related to the Dennis Family Homes acquisition and new leases for corporate facilities.

Market Outlook and Growth Drivers

Looking ahead, Simonds is well positioned to benefit from favourable market conditions, including government housing initiatives such as the Housing Australia Future Fund and sustained demand for affordable housing. Land supply constraints in Queensland and South Australia may continue to pressure prices, but improved affordability in Victoria and the expansion into Western Australia offer promising growth avenues. The investor channel, supported by turnkey product offerings, is expected to remain a key growth driver.