Raptis cash drained by tower deals
SHAREHOLDERS in ASXlisted Raptis Group have been told it has depleted nearly all its cash reserves after paying $2.8m to private entities owned by the Raptis family.
Despite its empty pockets, the group says positive times are on the horizon as it prepares to make yet more deals with private Raptis entities.
Shares in Raptis Group were briefly suspended on Monday after it failed to lodge its quarterly results on time, but were reinstated the following morning after the results were filed.
The cash flow report showed the listed Raptis Group had received $7779 in the three months to March 31 and spent $740,331. The company had $2.9m cash at the beginning of the quarter, and had $131,833 by the end.
“Securing the management rights business incurred a significant outflow in the period but is expected to produce positive cash flow, over the balance term of 24 years of the agreement,” the group said.
Raptis Group shareholders agreed in March to pay chairman Jim Raptis and wife Helen more than $2.8m of its $2.9m reserve for management rights in two Gold Coast towers, as well as on a development management agreement for the Pearl project.
Private Raptis family entities are working on more than $300m in development projects on the Gold Coast.
Public Raptis Group’s only recent development, a 2018 Brisbane townhouse project, made $25.5m in revenue but netted only a $530,000 profit.
As well as spending more than $2m on private Raptis management rights, Raptis Group paid $680,509 to other non-specified related entities in the March quarter.
The group said these payments were for costs related to three future development management deals, yet to put to shareholders, for undisclosed “potential development sites”.
According to Raptis Group, the new agreements, if approved, would provide a minimum of $516,000 this year with potential further income of $7.7m between December 2024 and December 2026.
The group said the new development management agreements would be based on the Pearl one approved in March.
“The payment … was for feasibility costs, including architects, development approval application, valuation and other costs relevant to the proposed developments subject to the proposed arrangement,” the company’s report said.
“The amount was paid for third-party costs with no profit or margin to the entity associate with Mr James Raptis that assisted with this feasibility exercise.”
Raptis Group said it was working with a potential funding partner, seeking sites and exploring company structures to develop and hold build-torent projects.
The results come as developer Jim Raptis faces a $109m tax assessment and $80m asset freeze after Federal Court action from the Australian Taxation Office.
The matter is listed for case management on May 10.