Homebuilder Simonds Group hit by material and labor shortages

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“While further lockdowns are not expected as far as FY21 and 1H22, it is still possible that there will be restrictions on access to venues, our display centers and other potential impacts on the supply chain if they occur.”

Shares of Simonds were trading down 2.5¢, or 7%, at 33¢ on Wednesday afternoon.

Insufficient supply: Simonds CEO Rhett Simonds with a hard-to-find waffle capsule on site in May last year. wayne taylor

Figures from the Australian Bureau of Statistics confirmed the pressure on builders on Wednesday, showing construction costs rose 2.5% in the December quarter.

“There hasn’t been a greater increase in costs since the introduction of the GST in 2000,” said Craig James, chief economist at CommSec.

“Construction costs rose 6.5% year-on-year.”

Even longer-term supply contracts can’t protect the nation’s largest volume builders from skyrocketing costs of imported materials or disruption of production lines.

Simonds chief executive Rhett Simonds warned last year of industry-wide shortages of key materials, such as polystyrene waffle pods used in poured concrete slabs as part of building foundations. ‘a house. Mr Simonds said in May that the company expected to feel the brunt of rising prices over the next six to 12 months.

Simonds has declared no dividends. The company which began life as a publicly traded company in 2014 has not paid a dividend since 2015.

The company said site starts rose by five to 1,177 in the first half.

“The increased demand continued after the HomeBuilder relaunch, resulting in pressure on trades that extended construction periods and impacted trade rates,” the company said.

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