$150M THROWN AT VILLA WORLD, BUT IT ONLY WANTED $30M

Written on the 30 January 2015 by Nick Nichols

$150M THROWN AT VILLA WORLD, BUT IT ONLY WANTED $30M

VILLA World has found a sweet spot with investors who have thrown $150 million at the company, even though it only wanted a little over $30 million.

The Broadbeach-based housing developer has secured $31.7 million through a share issue that has closed five times oversubscribed and paved the way for the company to capitalise on a surge in residential sales across south-east Queensland and Victoria.

The pot was also sweetened today with Villa World upgrading its full-year profit forecast to at least $28.5 million. This comes just two months after lifting its profit target by 14 per cent to $27 million.

Villa World today reported an unaudited after-tax profit of $13 million for the December half, almost double the $7.6 million recorded a year earlier.

Villa World raised $26.7 million from the share issue, pitched at $1.90 a share, with all of the company's biggest shareholders topping up. About $6 million of that was secured from a retail offering managed by Morgans.

A further $5 million will come via a share purchase plan for eligible shareholders.

Villa World CEO Craig Treasure says the share purchase plan has yet to be finalised, but he expects this to be around three times oversubscribed.

The overwhelming response has left investors to rush to the open market to top up after missing out on a bigger allocation, and more than 3.3 million shares changed hands in Villa World today.

"This is a huge vote of confidence in Villa World as a company and our whole team," says Treasure. "All our major shareholders took up their allocation, plus there are some new institutional investors."

Treasure says the funds will be used to finalise acquisitions as Villa World targets sales volumes it last recorded prior to the GFC.

"This is about us having the ability to continue to grow and restock the business," he says. "We are seeing a lot of continuing opportunity in south-east Queensland and Victoria, and raising these funds let us take advantage of some of these opportunities."

Treasure says Villa World is working on a number of deals around Brisbane and in the Brisbane-Gold Coast corridor markets that he says have been "kind" to Villa World in the past.

"We will now move to finalise our negotiations on different sites. We always have quite a few that we're working through and looking at, but this now means we can progress those a little faster than we may have otherwise done.

"This year we're on track to sell and deliver around 850 to 900 lots. We have enough stock and projects to deliver in excess of 1000 in 2016 already. It will just depend on how strong the market is.

"Villa World sold 1000 products a year prior to the GFC and we'll easily get back to that range with the new projects we have coming along."

The new sites are expected to be delivered in 2017-18 and come on the heels of $103 million in site acquisitions this financial year.

Villa World has affirmed it is on target to pay a 6c interim dividend.

Despite the issue of 14 million new share, Villa World's share price held above $2 after resuming trading following a two-day halt. The company, traditionally a yield driven stock for investors, has affirmed its policy of paying out dividends at the rate of 50 to 75 per cent of net profit after tax.


Author: Nick Nichols

Latest News

STARSHIPS WERE MEANT TO DELIVER DOMINO'S PIZZA

NICKI Minaj may have been off the mark when she declared 'starships were meant to fly'. However, she m...

QUEENSLAND WEATHER UPDATE: MAJOR AIRPORTS STILL IN BUSINESS DESPITE CANCELLATIONS AND DELAYS

DESPITE the storms and flash floods which are continuing to wreak havoc across several Queensland cities and towns...

STARS ALIGN AS GOLD COAST ICON REBRANDS

TODAY marks a shift in the Gold Coast's constellation as the iconic Jupiters Hotel and Casino officially rebra...

OROTON GOES CLICKS AND BRICKS AS PROFITS SLIDE

TWO former Aussie lawyers have turned their passion for fashion into a $15 million dollar international business six ...

Related News

STARSHIPS WERE MEANT TO DELIVER DOMINO'S PIZZA

NICKI Minaj may have been off the mark when she declared 'starships were meant to fly'. However, she m...

RAY OF HOPE FOR SLATER AND GORDON AS LENDERS STEP IN

EMBATTLED law firm Slater and Gordon (ASX: SGH) has announced to the ASX that it has launched confidential discussion...

SPROUTX PROVIDES THE SEED FOR AGTECH STARTUPS

AGTECH innovation fund SproutX has opened applications for its first accelerator round, backed by $10 million from...

GAS PRICES MAY FORCE BRICKWORKS TO TAKE MANUFACTURING OVERSEAS

BRICKWORKS Limited (ASX:BKW) chairman Robert Millner says soaring energy prices may force the company to turn to offs...

EVENTS COMING UP

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter