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Nov 30, 2021
Pure Cycle Q1 2022 Earnings Report
Pure Cycle reported net income increase driven by increased lot sales.
Key Takeaways
Pure Cycle Corporation reported a net income of $1.5 million on revenues of $4.3 million for the three months ended November 30, 2021. The company continues construction on the second development phase of the Sky Ranch Master Planned Community.
Revenues of $4.3 million for the three months ended November 30, 2021.
Received the second progress payment for Phase 2 LDA lots of Sky Ranch.
479 or 94% of lots in the initial phase of Sky Ranch have purchased water and wastewater taps, totaling $14.2 million in tap fees to date.
Completed construction of the first three single-family rental homes and rented the homes within ten days of completing construction at rates higher than budgeted.
Pure Cycle
Pure Cycle
Forward Guidance
The second development phase continues to progress, driving lot sales revenue which is anticipated to continue to grow through fiscal 2022.
Positive Outlook
- Lot sales revenue is expected to grow through fiscal 2022.
- Single-family rentals are another great revenue driver.
- Company is excited to grow the single-family rentals business in the coming years.
- Utility customer base continues to grow as occupancy in the first phase of Sky Ranch increases.
- Recurring revenue from residential water and wastewater usage is steadily growing.
Challenges Ahead
- Total Revenues decreased for Q1 2022 compared to Q1 2021, due to the decrease in tap sales after the near completion of Sky Ranch Phase 1.
- Saw increases in the cost of raw materials in this next phase which increases overall budget in the first subphase
- Tap sales declined in Q1 2022 as compared to Q1 2021, due to timing of closings at Sky Ranch.
- Revenue for three of the four builder contracts in the second development phase are recognized over time with progress measured under the percent of completion method; therefore, revenue will fluctuate due to timing of construction activities throughout the second phase.
- No building permits have been issued for the second development phase as of November 30, 2021