Setting a foundation and shaping Queensland housing market, construction company Fleetwood (ASX: FWD) has won a contract to design, build, and install 60 homes for the Queensland Department of Housing, Local Government, Planning and Public Works. This aligns with Fleetwood’s strategy to expand its presence in the social housing sector and contribute to solving the national housing shortage.
Founded in 1964, listed on ASX since 1987, Fleetwood is known for its innovative services for building solutions, community solutions including Glyde Digital and RV solutions including Camec brand and NRV.
Over the past two years, Australia’s housing market has been a focal point of discussion as both economic and social challenges. A shift in domestic policies and higher inflation rates has strained the construction industry, leading to the well publicised collapses of builders due to heightened raw material costs.
While low interest rates initially maintained economic stability during the pandemic, resultant inflation, which reflected in raw material costs, prompted the Reserve Bank of Australia (RBA) to increase interest rates in 2022, ahead of their stated 2024 introduction of rate rises. This had a major impact on those who borrowed or commenced building during the pandemic and put substantial strain on Australia’s housing economy where homes were not being built fast enough to cope with housing demand.
The Initiative by Queensland Government “Homes for Queenslanders” aims to build 53,500 new social homes across the state integrated with specialised support to target diverse communities. Fleetwood has scored a contract to build 60 modular homes, expected to generate $40 million in revenue in FY25.
Commenting on the award, Managing Director & CEO, Bruce Nicholson said: “Fleetwood is delighted to be playing a key role in the Queensland Government’s response to providing efficient and sustainable housing solutions to regional and remote areas of Queensland.
“The award aligns with Fleetwood’s strategy of growing in the social housing sector by working closely with State Governments, community housing providers and private developers.
“While the Company has been successfully supplying limited quantities of homes into this sector for some time, the award of this larger package positions Fleetwood to display our capability to play a part in solving the critical housing shortage nationally. We are confident this contract award will bode well for the opportunity to take part in subsequent awards of homes.”
For the Half Year ended 31 December 2023, Fleetwood reported $229.9 million revenue which was a 3% increase on the previous corresponding Half Year. However, with improvements to their supply chain business, the Company generated $3.9 million in net profit after tax for the Half Year, a substantial turnaround from the $0.8m loss incurred over the same period a year ago.
Sidra is a Business Writer with The Sentiment
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