Villa World seeks $30m cash raising
GOLD Coast housing developer Villa World is seeking a cash injection from investors as it aims for growth.
The Broadbeach-based developer is understood to be chasing $30 million – $20 million through an equity placement and $10 million through a share purchase plan.
Stockbroker Morgans is understood to be underwriting the placement.
New shares are expected to be issued at $2.25, which would be a 5.46 per cent discount to its last traded share price of $2.38.
The capital is to be used to fund acquisitions.
The company’s shares yesterday entered a trading halt which is expected to remain in place until tomorrow while Villa World completes the capital raising.
The developer had a $270 million market capitalisation prior to the halt.
The raising comes just weeks after Villa World made its first Melbourne land acquisition in more than two years, paying $33 million for a 42ha site at Clyde in the city’s southeast growth corridor.
Purchase of the site, zoned for 400 lots, will settle next year.
At the time, managing director Craig Treasure said the Melbourne market was extremely strong, and he welcomed a state government housing affordability package to cut taxes and free up development land.
“We have been looking to grow our five to six-year pipeline of projects in Victoria, specifically in the southeast corridor because of the proximity to transport, excellent education facilities and attractive retail precincts,” Mr Treasure said.
The acquisition-hungry developer which targets the affordable, first-homeowner and mid-range housing market, is looking to grow its east coast portfolio, targeting a weighting of 40 per cent in Victoria and Queensland, and 20 per cent in NSW. Villa World last month hiked FY17 full-year net profit guidance to $37.5 million, up 11 per cent on FY16’s $33.7 million.
It posted a reduced first-half net profit of $19.6 million, down from $20.4 million a year earlier.
However, Mr Treasure said the company was counting on a strong second half to lift fullyear results because of record carried-forward sales.
He said Villa World was expecting its strongest land-sales result.