LEADING Queensland housing developer and builder Villa World (VLW) has joined the ranks of Australia’s top companies with its entry into the S&P/ASX300 today (March 6).
Villa World managing director Craig Treasure said the achievement of market capitalisation, liquidity and free float objectives had led to the company’s elevation.
“We are thrilled to reach this milestone which follows a pleasing half-year result and highly successful capital raising in January,” he said.
“We expect an uptick in share demand as index managers roll into the stock.”
Mr Treasure said Villa World’s market capitalisation had grown from $58 million in January 2012 to approximately $230 million.
“Several factors have influenced this growth, namely a reinvigorated sales and marketing strategy, a solid restocking program, capital management initiatives, and more generally the upswing in the market,” he said.
Mr Treasure said strong results and guidance had driven share price performance while the January 28 capital raising had increased the issued capital.
“We’ve received strong support from existing institutions,” he said.
“We’ve been working with our brokers, Moelis and Hunter Green, towards having the next round of institutional investors primed to buy shares.”
Villa World chief financial officer Paulene Henderson said leading stockbroker Morgans also participated in the recent raising, placing Villa World stock through its retail and institutional network.
“Morgans has been a strong net buyer in the aftermarket, which has provided liquidity and demand and helped underpin share price performance,” she said.
“Dividends appeal to retail investors, particularly in the current low interest rate environment, and Villa World will pay at least 15cps or near seven per cent dividend yield (FY15).”
Villa World subsequently ran a Share Purchase Plan which closed on February 25 and raised a further $5 million.
Ms Henderson said the exit of private equity group CVC as a major investor last year had helped pave the way for Villa World’s ASX300 entry.
“The sell down by CVC moved us a step closer to that inclusion while being welcomed by the institutional market which had been seeking an opportunity to invest in Villa World,” she said.
Mr Treasure said Villa World had also addressed governance requirements for the ASX300 index with the appointment of Gerry Lambert as a non-executive director.
Villa World recently upgraded its FY15 profit guidance to at least $28.5 million before tax (FY14:$22.6 million) on the back of strong market conditions, sales momentum and clarity on delivery.
The company recorded a significant rise in sales with monthly sales rising from 44.7 (1Q15) to 72.7pm (2Q15) and has a FY16 sales target of between 1000 and 1200 dwellings.
Mr Treasure said sales were growing due to positive market conditions, Villa World’s increased inventory levels, and expansion of the company’s traditional target buyer to include first-home buyers and investors.
“Looking forward, we continue to see attractive acquisition opportunities in key markets and we aim to grow our development pipeline during 2015 to build future earnings and capitalise on the positive market conditions.”
Established in 1986, Villa World is Queensland’s longest-established ASX-listed housing developer and one of Australia’s largest housing providers.