Family-Run Philippine Home Builder Remains Consistent
Watch the video with Andrew Stotz or read a summary of the World Class Benchmarking on Vista Land & Lifescapes Incorporated.
Background
Vista Land & Lifescapes Incorporated (VLL) is a Philippines-based home builder and property developer. With more than 300,000 homes built and a land bank of over 2,400 hectares, 76% of which is in Mega Manila area, the developer is primed to continue building and selling properties at a steady clip.
It operates in 36 provinces across the country, and affordable residential properties account for 70% of revenue.
Business Description
VLL has five big home brands.
The brand Communities Philippines sells low-cost/affordable residential properties outside Mega Manila at prices from US$20,000-$80,000. This brand accounted for 45% of revenue in 2015.
Camella caters to the low-cost segment in Mega Manila, with prices from US$20,000-$80,000 and accounted for 25% of 2015 revenue.
VLL has three brands in the mid-to-luxury segments. CrownAsia homes for the middle-income segment in Mega Manila are priced from US$80,000-$200,000. Brittany offers luxury houses in master-planned communities for the high-end segment in Mega Manila at prices of US$200,000 and greater. Vista Residences provides residential/commercial condominium units at prices from US$40,000-$360,000.
By the end of 2015, VLL acquired an 88% stake in Starmalls (STR PM), a company focused on retail real estate such as shopping malls for the Filipino mass market that carries its own brand name—Starmall. Starmalls has become an important growth driver for VLL as its revenue and net income grew by more than 70% in the first half of 2016.
Leadership
Chairman of the Board, Manuel Villar, Jr., is known foremost to most Filipinos by his distinguished political career, where he served as both the leader of the House of Representatives and the Senate at different times between 1992 and 2013. He founded Camella Homes in the early 1970s and successfully managed it to become the largest home builder in the Philippines today.
Son of the founder and current chairman, President & CEO Manuel Paolo Villar graduated from the Wharton School of Business at The University of Pennsylvania with a B.S. in Economics in 1999. He was elected President and Chief Executive Officer of the Company in July 2011.
Since assuming leadership of VLL, the younger Villar has shown himself capable of sustaining above-average profitability, but growth has appeared harder to drive in recent years.
World Class Benchmarking
Mr. Villar has kept Profitable Growth at a stable ranking of #4. VLL ranks better than 210 of 350 medium-sized real estate companies globally.
Profitability has slightly fallen to #4 from #3 since 2014, and Growth has been less consistent in the last three years.
Profit Margin remains the strength on the Profitability side. Sales growth have fallen of late, dragging down Growth, though you can notice that the Margin change has improved one step in the past 12 months.
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