$80m institutional placement to deliver growth
13/11/2006Peet Limited is pleased to announce it has completed an $82 million equity raising, undertaken by institutional placement. Under the offer 20 million new shares were placed at an issue price of $4.10, representing the top end of the book build range of $4.00 to $4.10.
Mr Warwick Hemsley, Peet Limited Managing Director, said "We are very pleased with the institutional support shown to us through our first capital raising since listing in August 2004. There was broad based demand and we were able to bring a large number of new institutional investors onto our register. This is an important phase in our growth."
Existing shareholders will be able to participate in the capital raising under a Share Purchase Plan (SPP). Under the SPP all shareholders will be entitled to a maximum of $5,000 worth of shares at the same price as the institutional placement.
Mr Hemsley said the $82 million equity raising would strengthen the company's capital position to accelerate growth of the funds management business.
"We remain committed to our very successful funds management model," said Mr Hemsley. "We are keen to build on an already strong balance sheet and further grow the company's newer development projects including Peet's diversification into the retirement and commercial property sectors."
He said the company was also keen to lay strong foundations for the future and continue the company's scale of expansion by capitalising on larger acquisition opportunities, but at the same time maintain conservative gearing.
"Since listing in August 2004, Peet Limited has recorded strong growth and established itself as a national, diversified property group," he said.
In 2005/06, the funds manager, asset manager and land syndicator recorded:
- a 24.3% increase in net profit after tax;
- a 24.3% increase in earnings per share;
- a 17.2% increase in dividends per share; and
- a 42.5% increase in total assets.
The company has the third largest land bank among Australian Stock Exchange listed entities. In the six months to 30 September 2006, Peet Limited added more than 5,280 lots to its landbank, bringing the total number of lots to almost 31,000 lots with an estimated end value of some $5.4 billion.
"This capital raising will mean we can make larger, strategic and significant acquisitions to feed our funds management business," said Mr Hemsley.
Peet's landbank consists of syndicated, company owned and joint venture properties including:
- Peet Estates – the management of 67 projects in Western Australia, Victoria, Queensland and New South Wales;
- Peet Commercial – the development of shopping centres, service commercial units, offices, bulky goods outlets and medical and childcare centres;
- Peet Living – the development of low rise apartments, townhouses, gated villa complexes, mixed use and live/work accommodation; and
- Peet Retirement – the development of resort-style projects for the over 55s.
In June 2005, Peet Limited also established the Peet Income Property Fund, which invests in commercial and industrial properties and, last financial year, delivered returns to unitholders of 14.35%.
"Peet Limited has an experienced management team with a long history of taking a very responsible and low-risk approach to property investment– and the direction of the business," said Mr Hemsley.
"This capital raising is a strategic and sensible move for a company that is committed to delivering shareholders and investors sound returns over many years".
UBS is sole underwriter and book runner to the institutional placement.
