AV Jennings

[greengiraffe]

Remember Simon Cheong? SC Global is gone but Simon's down under vehicle remains listed.

Simon inherited AV Jennings (AVJ) following his takeover of MPH Holdings which subsequently renamed SC Global:

http://www.avjennings.com.au/AVJennings_80_Years.aspx
http://www.avjennings.com.au/getdoc/efbb...t2012.aspx

For those who are always aspiring the laid back Aussie lifestyle, AVJ is an interesting proxy. It is a niche builder and learning the dynamics of a big country's property market can be very interesting:

http://www.avjennings.com.au/getdoc/5812...J1H13.aspx

2. SUBSTANTIAL SHAREHOLDERS
As disclosed by latest notices received by the Company:

SC Global Developments Ltd 137,370,023, 50.03%
Guinness Peat Group plc 20,938,920, 7.63%
Orbis Australia Group 14,133,206, 5.15%

AVJ's latest reported book value is A$0.90, the lowest in many years as a result of flat to down property mkt conditions down under especially post GFC.

Due to its small cap (274.6m shares @ A$0.40 - total mkt cap of A$110m), liquidity has dwindled to literally a halt.

However, a closer examination of its CDP register revealed interesting shareholders like Oei HL and 2nd Chance Towkay.

Simon has already privatised his flagship by gearing to the tilts. Surely, he will be looking to deleverage on top of minimising the punitive taxes on completed luxury holdings.

Should he be able to realise SCGlobal's AVJ stake at book value, it will represent a cool A$123.6m for a geographical non-core. Will Simon play it again? As a seasoned deal maker - never say never.

However, how long will the entire process takes?

I am certainly a GG on this.

[ngcheeki]

"AVJ requests the trading halt until the commencement of normal trading on Wednesday 24 April 2013, or alternatively, if earlier, an announcement regarding the funding proposal is released."

http://info.sgx.com/webcoranncatth.nsf/V...500001B35/$file/FinalASXTradingHaltNotice-22Apr2013.pdf?openelement

[greengiraffe]

Diluting to buy out on the cheap again especially with Aussie prop mkt recovering?

AVJ has written off substantially to reflect the previously tough prop mkt conditions there. In the last 6 - 9 months, there has been substantial improvement in sentiment especially in NSW prop mkt where they have substantial interests.

"AVJ requests the trading halt until the commencement of normal trading on Wednesday 24 April 2013, or alternatively, if earlier, an announcement regarding the funding proposal is released."

http://info.sgx.com/webcoranncatth.nsf/V...500001B35/$file/FinalASXTradingHaltNotice-22Apr2013.pdf?openelement

[ngcheeki]

2 for 5 share offered at 37.5 cents. SC Global will fully taken up their shares and the remaining will be underwritten by Bell Porter. The issue price of $0.375 per share, which represents a discount of 4.5% to the VWAP of shares on the 20 trading days to 19 April 2013



Rationale:

Growth delivery
AVJ’s near term objective is to return lot sales to levels achieved in FY2010 and FY20111
 Development work was reduced in FY2011 and FY2012 in response to poor market conditions.
Inventory rebuilding has begun in response to subtle indications of improved market conditions
and will ensure adequate supply to market for FY2014 and beyond
 Settlement payments in relation to several previous land acquisitions are due during calendar
2013 and 2014 and the funds raised will assist with these payments
 The capital raised will assist in funding development works expected to contribute to earnings in
FY2014 and beyond

De-risk balance sheet
 Gearing to reduce from 23.8% to 15.5% on a pro-forma basis as at 31 December 20122
 Consolidated net debt to reduce from $111.9 million to $72.7 million on a pro-forma basis as at 31
December 2012

Financial flexibility
 Reduced reliance on corporate bank debt in favour of longer term project finance (as and when
appropriate) to better match funding requirements
 Increased financial flexibility will provide capacity to pursue build out of inventory and fund land
settlement payments
 Greater scope to consider other value accretive opportunitiesAVJ’s near term objective is to return lot sales to levels achieved in FY2010 and FY20111

http://info.sgx.com/webcoranncatth.nsf/V...60080FD01/$file/ASXAnnouncement1.pdf?openelement

[greengiraffe]

Simon Cheong is a shrewed businessman - for him to recap at the potential turning point of Australasia property market is indicative of the rumblings in the bigger picture.

At A$0.375, Simon is recapping at 50% discount to diluted and written down asset value for AV Jennings.

Page 16 - 24 makes good reading for anyone who could be conned into directly buying Aussie real estate.

http://info.sgx.com/webcoranncatth.nsf/V...600816330/$file/InvestorPresentation2.pdf?openelement

Vested
GG

[greengiraffe]

Rebuilding Jennings
Rod Myer
543 words
8 May 2013
The Age
AGEE
English
© 2013 Copyright John Fairfax Holdings Limited. Factiva.Gateway.Messages.Archive.V1_0.ELink
The Chartist

Investors in AV Jennings, the developer with operations in south-eastern Australia and New Zealand, could be forgiven for feeling a bit jaundiced about the expression "as safe as houses".

As this week's chart, produced by Mark Umansky - a certified financial technician and councillor with the Australian Technical Analysts Association - shows, the company's shares have been on a roller-coaster ride for the past nine years. Using a quarterly timescale, the chart shows Jennings peaked at an all-time high of $2.25 during the March quarter of 2004.

It then fell constantly and steadily to an all-time low of 25¢ in the June quarter of 2009. That represents a decline of 89 per cent. From there, Jennings proved resilient, with the share price climbing 100 per cent to close just below 52¢ in the March quarter of 2011.

However, the good times were cut short with 52¢ proving a major resistance level and the shares fell back to about the all-time low in the June quarter of 2012. Then strong buying support came in at about 29¢, turning the stock before its nadir. Since then, it has climbed slowly towards the 40¢ mark. Umansky says if the professional market continues to support Jennings the stock may retest the previous resistance point at 52¢.

Should it breach that level, it will prove the stock has been in an accumulation phase for the past 17 quarters, a positive that could lead to further advances. During an accumulation phase, a stock is said to be building strength for further rises.

If 52¢ is breached and becomes a support level, Umansky says the next potential resistance level is about 77¢. That is calculated by projecting the entire accumulation period upward for an equal interval, which in this case is about 25¢.

The importance of the 77¢ level is enhanced by the fact it provided a historical support level in September 2002 (point C on the chart) and represents a retracement to 23.6 per cent of the all-time high, using the Fibonacci number series.

Should 77¢ be breached, the next resistance level may be around $1.10, another historical support level at point B in December 2006 and a resistance level at point A in March 2002.

Its potential strength is enhanced by the fact it represents another significant Fibonacci retracement level, in this case 38.2 per cent of the all-time high, and it is approximately a 200 per cent upward projection of the accumulation range. The fact that all four of the above factors occur around the $1.10 level lends further weight to its significance, Umansky says.

On the fundamental side, Jennings reported a net loss of $19.14 million for the December half, with revenues down 42.6 per cent. Analysts predict a full-year loss, but the company says it sees gradual improvements in the marketplace, with low interest rates, improved affordability and a likely market undersupply.

Experienced journalist Rod Myer brings you technical analysis on the performance of stocks and markets. This is his first column for Money. This column is not investment advice. rodmyr@gmail.com

Quirky Investments returns next week


Fairfax Media Management Pty Limited

Document AGEE000020130507e9580003f

[greengiraffe]

Australian property market is in a different phase at least from that of Asia...

Home loans rise fastest in four years
• From:AAP
• May 14, 2013 3:37PM
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OWNER-OCCUPIER home loan approvals have posted the strongest jump in four years.
Personal and business financing are also showing signs of growth, following a series of interest rate cuts.
But home loan approvals are experiencing the strongest revival, rising by 5.8 per cent in March to cap off a 9.3 per cent increase since the start of 2013.
Commonwealth Securities economist Savanth Sebastian says it is the strongest quarterly rise in mortgages, at the start of a calendar year, since early 2009, after some first-home buyer grants were tripled.
"The low-rate environment is starting to foster a bit of activity," he said. "It could be the first signs of a revival in lending but it's still early days."
Still, the latest surge in loans may not stop the Reserve Bank from cutting interest rates further, from the current record low of 2.75 per cent.
"Rates at these sorts of levels haven't, in the last few months, fostered significant revival in activity," Mr Sebastian said.
"If anything, it's only been incremental improvements."
The Australian Bureau of Statistics lending finance data, released today, show housing finance growing at an annual pace of 12 per cent, the strongest in four years.
During March, personal finance loans rose by 0.6 per cent, while commercial lending ticked up by 1.5 per cent.
Lease financing, however, fell 4.1 per cent.
Mr Sebastian said banks were expected to work harder to win personal and business loan customers, as consumers choose to pay down more debt.

[greengiraffe]

Peet last traded at 1.165 vs book value of 1.33. It is on the prowl and with Oz interest rates at the lowest since 1959, it is likely to continue its accretive acquisition trail in the years ahead. AVJ is Simon's non core and his recent recap exercise more than meets the eye (AVJ 0.43 vs book value 0.75)

Peet target CIC warns holdouts it could seek more cash

BY:SARAH DANCKERT From: The Australian May 24, 2013 12:00AM
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PEET Limited's takeover target, CIC Australia, has warned that it will make a $25 million-plus capital raising to repay a loan expiring in September if holdout shareholders don't back the $76m offer from its Future Fund-backed suitor.

After making its tilt for the residential developer in April, Peet has secured only 84.17 per cent of CIC, with several minor shareholders refusing to accept the offer which they believe undervalues the company.

The holdouts include CIC chairman Maurice Loomes, who has 0.75 per cent of CIC shares on issue, fund manager Geoff Wilson with 2 per cent and Kyleast with 7 per cent. Several CIC company directors including managing director Col Alexander have sold into the 60c-a-share offer.

In what marks an escalation of tensions between CIC's executive ranks and Loomes and his supporters, Alexander warned the shareholders resisting the offer yesterday that not only would they need to stump up more capital in the raising or face significant dilution, but they also would not receive any dividends for the year if the raising took place.

Following the change of control of CIC to Peet, banker St George has brought forward the repayment date to September 30 for a $15m tranche of a $32m loan.

"CIC does not have this amount available as current cash resources, nor is it likely to be available from expected cashflows between now and September 30," Alexander said.

He said if Peet secured 90 per cent of shares on issue under its bid then a capital raising would not be required. The raising would be between $25m and $30m, he added.

Peet, with projects in Victoria, Queensland and Western Australia, aims to become a national developer through its acquisition of CIC, which has exposure to South Australia, NSW and the two territories.

[greengiraffe]

Home-building approvals rose 9.1pc in April
BY:ENDA CURRAN From: Dow Jones May 30, 2013 11:59AM
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THE number of Australian home building permits rose sharply in April in a sign lower interest rates may be boosting activity in a previously lacklustre sector of the economy.

Approvals to build or renovate houses and apartments gained 9.1 per cent from March, the Australian Bureau of Statistics said today. In March approvals fell 5.5 per cent.

The Reserve Bank of Australia has cut interest rates seven times since late 2011 in a bid to revive activity in weaker parts of the economy like home building. The latest cut, earlier this month, took the cash rate to a record low 2.75 per cent.

Building approvals rose 27.3 per cent in April from a year earlier, the statistics bureau said. Permits to build houses rose 2.5 per cent from a month earlier, while approvals for apartments, townhouses and other dwellings rose 18 per cent.

[greengiraffe]

http://info.sgx.com/webcoranncatth.nsf/V...F0008D7C7/$file/3JuneAnnouncementFinal.pdf?openelement