Despite the challenges with the weather and housing market, for the three months ended May 31, 2023, lot sales revenue increased as compared to 2022. This was mainly due to 2023 having two phases under construction (Phase 2A and Phase 2B). Revenue for lot sales is recognized over time with progress measured using the percent of completion method.
For the nine months ended May 31, 2023, lot sales revenue decreased as compared to 2022. This was mainly due to the timing of development activities at Sky Ranch which was impacted by the weather and pressures on the overall housing market. The price per lot for delivered lots in Phase 2 increased an average of 40% over Phase 1. Revenue for lot sales is recognized over time with progress measured under the percent of completion method; therefore, revenue will fluctuate due to the timing of construction activities. Additionally, lot sale revenue declined as we delayed the start of Phase 2B by a few months due to the increased pressures on the housing market in late 2022. We believe lot sale revenues will pick up pace throughout the remainder of our fiscal 2023 as we are in the summer months, which are the best months for construction activities.
Single Family Rentals
In 2021, we built three homes that were rented to separate families effective November 1, 2021. In the first quarter of fiscal 2022, we contracted for the construction of a fourth rental home, which was completed and rented in December 2022. In the third quarter of fiscal 2022, we contracted for the construction of 10 rental units in Phase 2A, six of which were completed and rented after May 31, 2023, and the remaining four we believe will be ready for rental around the end of our fiscal 2023. Additionally, we broke ground on Phase 2B this quarter, which has 211 lots in total, of which we retained 17 for use in our single-family rental business.
Earnings Call Information
Pure Cycle will host a conference call on Thursday July 13, 2023, at 8:30AM Eastern (6:30AM Mountain) to discuss the financial results and answer questions. Call details are presented below. We will post a detailed slide presentation, which provides an overview of Pure Cycle and presents summary financial results on our website which can be accessed at www.purecyclewater.com.
When: 8:30AM Eastern (6:30AM Mountain) on July 13, 2023
Call in number: 888-506-0062 (access code: 943198)
International call-in number: 973-528-0011 (access code: 943198)
Replay numbers: 877-481-4010 | 919-882-2331 (passcode: 48662)
Replay available until: July 23, 2023 at 8:30AM ET
Other Important Information
Pure Cycle will be hosting its annual investor day on July 19, 2023. Please see the Investor section of our website for more information and how to RSVP for the tour and/or the Q&A session via Teams.
Our CEO Mark Harding will be presenting at the IDEAS conference on August 24, 2023, so stay tuned for additional information on that conference.