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INVESTORNEWSLETTER
December 2016
VILLAGE BUILDING COINVESTOR NEWSLETTERDecember 201602
COMPANYNEWS
Commencement on the construction at Yarraman Village, Noble Park is imminent with site clearing works currently underway. It is a milestone for Village to formally be underway on our first Melbourne development and testament to a lot of hard work from many individuals within the business, especially Tom Maidment, our VIC Development Manager.
We continue to focus on acquisition opportunities in Canberra, Melbourne, Sydney and the Illawarra. We have feasibilities underway on a number of sites across these markets and hope to be coming out to our shareholder and investor base with new opportunities in the first half of 2017.
We are introducing quarterly information evenings for syndicate investors to provide in depth updates on project performance. The first of these were held on 12th and 13th December and the next round will be scheduled for March. We trust you will find these sessions of value. Our Development Managers and Management Team members will be in attendance at each one.
As I’m sure many of you are, I am looking forward to the Christmas break. Sarah, Archer, Isabelle and I will be spending Christmas in Victoria with family and then holidaying with friends. Thank you all for your loyal support of Village throughout 2016. Wishing you and your families a safe and happy holiday period and I look forward to seeing you all in 2017.
Best regards,
Travis Doherty Chief Executive Officer
TO OUR VALUED SHAREHOLDERS AND INVESTORS
I hope this finds you all well. It’s been an exceptionally busy quarter for Village Building Co as we continue to deliver our development program, with an unprecedented number of projects in critical phases.
A major feature this quarter, and a particular highlight for me being my first as CEO of the business, was the Annual General Meeting (AGM) held on Monday 21st November. We have included a spread of photos taken at the event in the newsletter. For those who were unable to attend, a copy of the presentation from the evening is available from Sally Muse. You can view a video that recaps on our FY16 achievement in the investor section of the Village website at www.villagebuilding.com.au/invest
You will all be aware of the delays announced on the South Jerrabomberra project in mid November. This is a result of further negotiations required between NSW Department of Planning and Environment, Queanbeyan-Palerang Regional Council and ACT Government on the infrastructure requirements and associated costs for the whole South Tralee land release area. The time it will take to complete these negotiations is unknown and as a result we cannot reliably advise purchasers a delivery date for their property. Purchaser response to this news has been calm and considered. Village is agreeing to contract rescissions for purchasers who wish to withdraw. You may have seen the associated media coverage in The Canberra Times which was part of a strategy to proactively engage the media and influence the message. We will keep all shareholders and investors abreast of our progress on the project.
Construction has commenced this quarter on Westside, Indooroopilly under the stewardship of Sam Burgess, our QLD Development Manager. Construction has also commenced on Carramar, Moncrieff. Nick Gray, one of our ACT Development Managers, has done a terrific job in getting this project off the ground on schedule. A ‘Meet The Builder’ day was held on site on Saturday 10th December and was well attended by purchasers and prospective purchasers alike.
Front cover image: Annual General Meeting, Canberra
VILLAGE BUILDING COINVESTOR NEWSLETTERDecember 2016
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SHAREHOLDERINFORMATIONCOMPUTERSHARE
We trust all shareholders have received their Computershare information packs and have been able to log into the shareholder portal. Village is excited to be partnering with Computershare and to be delivering a professional and sophisticated portal for shareholders to access their investment details. If you have any queries regarding the Computershare system, please contact Sally Muse.
FINANCIAL YEAR 2016 IN REVIEW
At the AGM event in November we released a video reviewing Village’s financial year 2016.
This production covers the highlights for the financial year ending June 2016 including interviews with our CEO Travis Doherty, Founder and Non-Executive Director Bob Winnel, and each of our Development Managers at their projects. It also outlines our focus for the business going forward. You can view it at www.villagebuilding.com.au/invest
DIVIDEND
At the AGM, the Board announced
the declaration of a final fully franked
dividend for FY16 of 5.0 cents per
ordinary share which brings the FY16
total fully franked dividend to 8.0 cents
per share. The dividend will be paid on
16 December and the payment process
will be managed by Computershare.
VILLAGE BUILDING COINVESTOR NEWSLETTERDecember 201604
Preparing for the AGM: Megan McIlroy, Sarah Coxon and Sally Muse – VBC
CEO Address: Travis Doherty
Post AGM Cocktails
VBC Development Managers: Paul Roddam - NSW; Greg Garner – ACT/NSW; Nick Gray – ACT; Sam Burgess – QLD;
Tom Maidment – VIC/NSW; Nigel Farquhar – NSW
Shareholders and Investors: Tom Roberts and Dorothy Roberts Chairmans Address: John McCarthy AO
VILLAGE BUILDING CO AGM 2016
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Judy Taylor, Ross Di Bartolo, Bob Winnel AM and John McCarthy AO
Founder and Non-Executive Director Address: Robert (Bob) Winnel AM
VBC Development Managers: Paul Roddam - NSW; Greg Garner – ACT/NSW; Nick Gray – ACT; Sam Burgess – QLD;
Tom Maidment – VIC/NSW; Nigel Farquhar – NSW
VBC Leadership Team: Travis Doherty; Kate Freeman; Vince Whiteside; Rebecca Mikkonen; Kylie Chapman; Melanie Andrews; Ken Ineson; Bryan Leeming;
Albert Dabas
Geoff Applebee, John McCarthy AO, Travis Doherty and Bob Winnel AM
Post AGM Cocktails
Chairmans Address: John McCarthy AO
VILLAGE BUILDING COINVESTOR NEWSLETTERDecember 201606
INVESTMENTOPPORTUNITIESIn addition to the Series A, B and C Secured Notes released on 1 September 2016, the Company is pleased to advise the release of 1 and 2 year Secured Notes options via Series D and Series E notes.
The Secured Notes document is available to be viewed on the Village Building Co website. For any queries, please contact [email protected].
SERIES A NOTES — Have a term of 3 years and pay 11.0% interest per annum for the first two years, and thereafter 9.5% above the RBA Cash Rate.
SERIES B NOTES — Have a term of 4 years and pay 11.5% interest per annum for the first two years, and thereafter 10.0% above the RBA Cash Rate.
SERIES C NOTES — Have a term of 5 years and pay 12.0% interest per annum for the first two years, and thereafter 10.5% above the RBA Cash Rate.
SERIES D NOTES — Have a term of 1 year and pay 10.0% per annum.
SERIES E NOTES — Have a term of 2 years and pay 10.5% per annum.
OTHER WAYS TO INVEST IN VILLAGE BUILDING CO.
Buy shares
A solid investment – our share price, current at November 2016, is 85c, and our last annual dividend was 8c fully franked, giving a 13.45% return.
Invest in syndicated projects
We target an IRR of 20% and we expect to have new syndicate opportunities to offer investors in the new year.
It is important to note that syndicate and secured note opportunities are only available to investors defined in the Corporations Act as sophisticated investors or professional investors. Sophisticated investors include:
• a person investing $500,000 or more;
• a person who provides a certificate from a qualified accountant dated no more than two years ago certifying that the person has net assets of at least $2.5 million or a gross income for each of the last two financial years of at least $250,000.
As with any investment, property is not without its risks and we encourage investors to conduct their own research prior to making investment choices, including price, taxation advice, interest rates and residential property market cycles.
For more information please contact Melanie Andrews, [email protected] or (02) 6241 6844.
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WORK HEALTH & SAFETYINFORMATION
The Village Staff Development Days, held during this quarter, presented an opportunity to engage, educate and work with staff from across the business in developing and further enhancing our safety culture and emphasising our number one business value, safety first.
WORKING SAFE
With tree clearing at Yarraman Village, earthworks at WoodLinks Village and Carramar, excavation at Westside, and construction at The Brickworks and Horizon at Coombs, this quarter has been busy. From a safety perspective, we remain at the top of our game with zero loss time injuries and zero medical treatments – all our sites have remained injury and incident free. We have had visits to our NSW and ACT sites by respective Worksafe authorities and once again received zero non-conformance notices.
PLAYING SAFE AT THE BIG BANANA
This quarter we undertook routine maintenance on attractions during the quieter period and engaged an external safety engineer to re-certify the attractions requiring plant registration. Staff training was tested in simulated emergencies and we identified some stand out performers as the Big Banana Fun Park works hard to continue providing a safe and fun environment for families.
Horizon at Coombs
We value input from all staff and stakeholders and strive for a safe and inclusive working environment.
0 SERIOUSINCIDENTS 98% ONSITE
COMPLIANCE
VILLAGE BUILDING COINVESTOR NEWSLETTERDecember 201608
DEVELOPMENTUPDATES
NSW NSW
THE MEADOWS (AUSTRAL 1) AUSTRAL
The Development Application (DA) is being finalised by Council and we are anticipating an approval for the first 71 lots in early January 2017. Construction is anticipated to commence in March once we have obtained a construction certificate. A second DA for a further 10 lots is being assessed by Council and approval is anticipated in March 2017. There were no comments or objections received during the public exhibition period. Sales have begun to slow due to limited stock however are expected to pick up again once construction commences.
NSW
THE BRICKWORKS BULLI
There are 58 houses currently under construction in Stage 2 with the first batch of Stage 2 settlements scheduled for late January 2017. Stage 2 civil works are complete with registration expected late December and Stage 3 civil works have just commenced now that the final earthworks for the site have been completed. A staged land release for the remaining 28 lots in Stage 3 saw 16 lots sold and we are currently undertaking a further staged release in the coming months.
NSW
PARKLANDS (AUSTRAL 2) AUSTRAL
The first DA for 48 lots is being assessed by Council and we anticipate an approval in April 2017. A second DA for 75 lots will be lodged by the end of December 2016, followed by a third DA for 29 lots in late February 2017. Once Council provide feedback on the first DA, a sales and marketing strategy will be developed. Construction is anticipated to commence in July 2017.
NSW
THE SUMMIT COFFS HARBOUR
Sales continue to remain steady with the release of a further 6 townhouses. 6 townhouses are in the final stages of construction and are to be handed over to purchasers in early 2017. Sales on the land subdivision have slowed however we are looking to launch house and land packages with a well known local building group, Henman Constructions, in early 2017. We hope this generates renewed interest.
PARK LANE ARNCLIFFE
Sydney’s Inner South apartment market remains tough with the depth of the market continuing to grow and a short supply of local buyers. Notwithstanding this, we have had 9 sales in the last quarter. The project has been re-tendered to civil and main contractors, these tenders closed in mid-November and managing the construction price remains a challenge. We have seen a further deterioration to the surplus and IRR as a result of these pressures. We are doing everything we can to maximise return on the project and will keep investors and shareholders abreast of our progress.
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DEVELOPMENTUPDATES
YARRAMAN VILLAGE NOBLE PARK
Stage 4 was released for sale in mid-November and we are starting to see some momentum on enquiry levels. Construction on the civil works has commenced for Stage 1 with trees now removed from site. Montdami has been appointed as the civil contractor and will join JG King who was appointed last quarter as the builder. Demolition of the factories on site has been scheduled for early next year in preparation for multiple stages being constructed simultaneously.
VIC
WOODLINKS VILLAGE COLLINGWOOD PARK
Shadforths has been appointed to undertake the civil works for Stages 4 and 5. This work commenced at the start of November and marks another 66 lots under construction. Oliver Hume has been appointed as a project land sales agent for the site commencing in early 2017. The development approval for the on-site display village is with Council and a positive outcome is expected end of December 2016.
QLD
ABODE KALLANGUR
The final 10 terrace homes are under construction and are now at ‘lock-up’ phase. These are on track for completion by the end of 2016. All houses are now sold with the terrace homes the only stock remaining. Interest remains steady for the terraces and the project remains on track for sell out this financial year.
QLD
WESTSIDE INDOOROOPILLY
Westside is now officially under construction. McNab is progressing well with excavation of the basement and foundation works underway. Completion is forecast for early to mid-2018. More than half of the apartments are now sold, however, the sales rate has slowed in recent times and this is reflective of the softening of the apartment market in Brisbane.
QLD
ACACIA GROVE BEERBURRUM
Civil Contractors Australia has been appointed to complete the civil works at Acacia Grove. The bulk of the work remaining is the completion of the bio-retention basins and this work is well underway. This work is susceptible to delays by wet weather but the contractor is hopeful of finishing on site by the end of the year. Now that the estate is nearing completion, the sales rate has picked up and there remains steady interest from buyers with the project remaining on track to sell out this financial year.
QLD
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DEVELOPMENTUPDATES
SOUTH JERRABOMBERRA TRALEE
Purchaser response to the announcement of further delays earlier in the month has been reasonably well received, with many purchasers happy to have received clarity on the status of the project. VBC is continuing to work collaboratively with the NSW Department of Planning and Environment and the Queanbeyan-Palerang Regional Council to progress negotiations with the ACT Government to agree cross-border access arrangements.
ACT
CARRAMAR MONCRIEFF
Construction commenced in November and progress is tracking well. Required presales to underwrite funding are anticipated to be reached in February 2017.
ACT
HORIZON COOMBS
The Stage 1 unit plan has been registered and the first 16 apartments have settled. Construction on Stages 2 and 3 has recommenced and is tracking well. Sales activity has picked up in November, with only 2 properties remaining unsold in Stage 2 and sales in Stage 3 now moving at a steady pace.
ACT
Horizon at Coombs
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THE BIG BANANAFUN PARK
Business has slowed a little in recent weeks on the back of the devastating incident at Dreamworld, but the park is still tracking up on previous years and is ahead of the budget for the financial year.
The construction of our newest attraction, “The Racer” has commenced and is well underway. This new 6 lane giant slide will be located in the former snow slope building and will come off of a 17 metre platform height. Riders will slide down on hessian matts, racing each other to the finish line. “The Racer” is estimated to be the largest ride of its kind in the country and is expected to be completed by the end of January 2017.
The BBFP picked up a number of awards in recent months including the Gold Tourism Award in the category of “Major Tourist Attractions” in the North Coast Tourism Awards and the “Excellence in Business” award in the Sunny’s Business Awards. More importantly, The Big Banana was recently voted Australia’s most popular BIG thing by the Australian public! A Wotif survey of more than 1,800 Australians found Coffs Harbour’s Big Banana had beaten the Big Pineapple on the Sunshine Coast for the title of the number one big Aussie thing people have posed with for a holiday photo.
The Big Banana Fun Park (BBFP) experienced another great school holiday period in September and October with record visitation and revenue recorded.
The parks General Manager and Operations Manager recently returned from Florida, USA after attending the largest Fun Park Attractions EXPO in the world, IAAPA Orlando. Michael Lockman and Richard Leslie reported an enormous turnout of exhibitors and obtained a number of great ideas and contacts from the event to help take the park to the next level over the coming years. There was over 15km of aisles to explore at the event!
The team is now preparing for its busiest period of the year, for which record crowds and revenues are expected once again. For the latest on what The BBFP has to offer, visit www.bigbanana.com.
The Village Building Co. LimitedP. (02) 6241 6844
W. www.villagebuilding.com.au
