FWD - turnaround, page-133

Prefabricated Homes in Australia

Prefabricatedhomes offer an alternative construction method to traditional brick and veneerhouses in Australia. Here's a breakdown of some key considerations:

• Cost: While websites often promote prefabricated homes as cheaper, the final cost might be comparable to traditional methods once site works, foundations, services, fittings, and fixtures are factored in.
• Construction Time: A significant advantage of prefabricated homes is the faster construction timeframe. Once the site is prepared, the prefabricated modules can be installed quickly, potentially offering earlier occupancy.
• Quality: Quality can vary between prefabricated home builders. While some offer high-quality options, others may not match the perceived quality of traditional brick homes. Careful research and selection of a reputable builder is crucial.
• Demand and Market Fit: While prefabrication offers some advantages, it may not be the most suitable solution for all applications.

Prefabrication for Builders:

• Benefits: Prefabricated construction allows builders to work under controlled conditions, minimizing weather impacts and potentially improving quality control.
• Limitations: Demand for prefabricated units may be lower compared to traditional methods, impacting the viability for some builders.

Granny Flats and Market Value:

• Traditional Brick and Veneer: In Sydney, two-bedroom granny flats built with brick and veneer typically range from $125,000 to $165,000, including everything.
• Prefabricated Granny Flats: Prefabricated granny flats can cost a similar amount or slightly cheaper but often require the homeowner to arrange additional works for services, fittings, and fixtures. So more headache for the homeowners.

Prefabrication and Market Impact:

• Market Growth: While prefabricated construction may experience some growth, it's unlikely to become a game-changer in the near future unless we get real value alternative or direct shipping from China at significantly cheaper cost.

Company Dividend Policy:

• Distribution of Profits: If a company distributing 100% of its net profit as dividends signifies prioritizing shareholder returns over reinvesting profits for future growth. This approach may limit the company's potential for long-term expansion and hence impact re-rate of share price.

Obviously, FWD has a history and I suggest one should go through it on https://www.marketindex.com.au/asx/fwd