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AV Jennings plunges into the red


Residential developer AV Jennings says its short-term outlook for the property market remains uncertain after it posted a $29 million full year loss.

The builder posted a $12.9 million profit in the previous corresponding period.

The loss for the year to June 30 was in line with guidance issued late July, when the company warned it would plunge into the red with a net loss of between $27 million and $32 million.

Revenue for the year dropped 12.5 per cent to $188 million, from the $215 million in the prior corresponding period.

The company said it would not pay a final dividend, making the partly-franked distribution for the year half a cent per share.

The previous year, the company paid a final dividend of 1.5 per cents per share.

Announcing its results after the market closed on Wednesday, the builder said it was dealing with a tough consumer environment due to the impact of the high Australian dollar and economic uncertainty.

That had affected both the property and equity markets throughout the year, AV Jennings chief executive Peter Summers said.

"The European debt crisis has impacted worldwide, and whilst it continues to linger without proper resolution, financial and residential property markets will remain under pressure," Mr Summers said in a statement.

Mr Summers said the property market was yet to feel the effect of official interest rate cuts.

"Consumers are looking for some stability and consistency in general economic conditions and, hence, it is more likely any significant improvement will not flow through to the residential property market until later in 2012."

Mr Summers said that while the company's short-term outlook remained uncertain, a tightening housing supply in the long term would put the builder in a good position for a market recovery, should one occur.

"The current and forecast trends for immigration and population growth are strengthening and the shortage of supply in many areas of Australia will underpin long-term demand," Mr Summers said.

AV Jennings shares last traded at 31 cents.