The Melbourne land lease operator is seeking $275 million from institutional and eligible retail investors to keep buying a pipeline of sites.
The retail offer opens on Thursday, 29 February, after Lifestyle Communities Co-Founder and Managing Director James Kelly committed to spend $10 million and Australian Super, which owns 12% of the business, $40 million in the institutional round which opened on Thursday, 22 February, and was underwritten in 24 hours.
“The equity raising will provide funding capacity to support the delivery of LIC’s growth strategy and expand our development pipeline to help drive further earnings growth,” said James, who has identified five greenfield land sites.
“We are seeing a number of opportunities to buy further sites on top of the four that we have already purchased in FY24 year-to-date.”
It released a disappointing 1H24 financial report on Thursday, 22 February, with net profit after tax of $20.8 million, compared to $25.2 million for the previous corresponding half. New home sales of 124 dwellings for the half, compared to 141 previously, well below consensus expectations.
Jarden’s Lou Pirenc described the result as ‘weak’ in a client briefing.
“Whilst the $275 million entitlement offer is presented as an opportunity to benefit from market conditions, this comes after management stating repeatedly that LIC would not raise equity to grow the business,” he wrote.
“Having said that, given the pressure on cash flow and balance sheet, it should help remove a major pushback on the growth story.”
James said it has 10 lifestyle community projects in development, with another two to start in FY24.
He added Lifestyle Communities is to start a “new smaller footprint model” at Yarrawonga, on the south bank of the Murray River, 265km northeast of Melbourne’s CBD.
“This heralds a new opportunity to look at smaller sites as well as deliver single storey two-bedroom product that is appealing to younger Baby Boomers and Gen X,” James said.
Browse villages.com.au for the latest on Seniors Living including availability.
