Villa World : 23 Mar 2017 - Investors rally to back Villa World’s growth plans

23 March 2017

Investors rally to back Villa World's growth plans

Investors have rallied behind leading residential property developer Villa World, with its latest share placement

2.3 times oversubscribed.

The Company will look to pursue acquisitions and joint venture opportunities in New South Wales, Queensland and Victoria as it steps up its growth plan and looks to deliver on its target of continued cumulative average Earnings Per Share (EPS) growth of greater than 10% p.a.1

The Company today announced that it had completed a fully underwritten share placement to institutional investors to raise approximately $20 million, at an issue price of $2.25 per share.

The Company's Managing Director and Chief Executive Officer Craig Treasure said: "Take-up of the share placement shows strong support for our growth strategy and our prudent financial management."

The capital raising is continuing with a separate non-underwritten Share Purchase Plan (SPP) capped at $10 million, and a Bond Offer seeking to raise $50 million announced concurrently on 22 March along with the placement.

Mr Treasure said the Company's growth strategy was central to delivering on its commitment to increasing shareholder value.

"Our growing pipeline supports our target of continuing to achieve cumulative average earnings per share (EPS) growth of greater than 10% p.a.," he said.

The Company has contracted approximately $164 million in land acquisitions this financial year to date, with an expected yield of more than 2,300 lots.

Mr Treasure said the Company was pursuing an active growth strategy, seeking to build its pipeline of opportunities, and push to diversify its current portfolio mix to achieve a 20-40-40- split across New South Wales, Queensland and Victoria.

Currently, Queensland projects represent 84% of Villa World's revenue, however the Company has identified strong growth in Victoria and is keen to grow its market there.

Earlier this month, the Company announced its unconditional purchase of a 42-hectare site at Clyde, 55km south east of the Melbourne CBD, which will add more than 400 home sites to the Villa World portfolio.

This Melbourne growth corridor has already drawn strong demand for the Company with sales at its Cardinia Views estate, at Pakenham, outstripping forecast and due to sell out well ahead of schedule.

Robust sales and increased revenue contributed to the Company last month declaring a strong half year profit result and prompting an upgrade in its full year guidance to a profit after tax of $37.5 million, representing 11% expected growth on its FY16 result.

The Company declared an interim dividend of 8 cps. Directors anticipate a final year dividend of 10.5 cps, bringing total dividends of 18.5 cps for the full year - a strong 8.2% yield on the placement price.

1 The Company expects to maintain FY18 EPS at the FY17 level.

23 March 2017

The placement was undertaken at an issue price of $2.25 per share which represented a 5.5% discount to the closing price of the Company's shares on 20 March 2017 (the last trading day in which the shares of the Company traded before the launch of the placement), and a 6.6% discount to the volume weighted average price for the five trading days prior to (and including) 20 March 2017.

Mr Treasure said: "We are pleased that all of our existing eligible shareholders have the opportunity to apply for new shares under the Share Purchase Plan at the same discounted price as the placement."

NOTE: Additional information in relation to the placement and Share Purchase Plan is included in the presentation released to the ASX on 22 March 2017.

The Bond Offer is made under an Offer Specific Prospectus and Base Prospectus (together, the "Offer Documents") lodged with the Australian Securities and Investments Commission on 22 March 2017.

Eligible participants should read the Offer Documents carefully and in their entirety, including, the key risks sections of the Offer Documents which set out some of the key risks associated with an investment in the Bonds and the Company's business, before making a decision to invest in the Bonds.

A copy of the Offer Documents can be accessed online at www.villaworld.com.au/investor-centre or by contacting Villa World on 1300 651 684 (Australia) or +61 3 9415 4000 (international) Monday to Friday 9am-5pm (Sydney time). Eligible participants who want to invest in the Bonds must complete the application form that will be in, or will accompany, the Offer Documents.

For enquiries: Craig Treasure

CEO/Managing Director Tel: (07) 5588 8888

securityholder@villaworld.com.au

This announcement has been prepared for publication in Australia and may not be released or distributed in the United States. This announcement does not constitute an offer to sell, or the solicitation of an offer to buy, securities in the United States. The securities described in this announcement have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or the securities laws of any state or other jurisdiction of the United States and may not be offered or sold, directly or indirectly, in the United States except in transactions exempt from, or not subject to, the registration requirements of the U.S. Securities Act and other applicable U.S. state securities laws.

This announcement is not financial product or investment advice, a recommendation to acquire securities or accounting, legal or tax advice. It does not constitute an invitation or offer to apply for securities. It has been prepared without taking into account the objectives, financial or tax situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial and tax situation and needs and seek legal and taxation advice appropriate for their jurisdiction. Villa World Limited is not licensed to provide financial product advice in respect of an investment in securities.