Shares of Arvida Group Limited today began trading on the NZX Main Board following a successful IPO that raised $80 million in new capital to underpin the growth of the new retirement and aged care group.
Arvida currently has 17 villages across New Zealand: Glenbrae, Bay of Plenty; Molly Ryan, New Plymouth; Olive Tree, Palmerston North; Waikanae Lodge, Waikanae; Oakwoods and The Wood, Nelson; Ashwood, Blenheim; Ilam, The Maples, Mayfair, Park Lane, Rhodes on Cashmere, St Albans, St Allisa and Wendover, Christchurch; and Bainlea and Bainswood, Rangiora.
Strong demand for the shares saw the shares priced at $0.95, at the top end of the indicative price range of $0.85 to $1.00.
Arvida Chairman Peter Wilson says the Company is delighted to have attracted the strong support of high quality shareholders including new and existing investors.
“Our new shareholders recognise that the foundation portfolio of 17 villages across New Zealand provides a strong base to meet the growing demand of retiring New Zealanders for high quality independent living along with the assurance that their needs will be catered for in later years. Our 1,000 dedicated staff and skilled management team are fully engaged in making Arvida a leader in the provision of retirement living and aged care services.”
Arvida has now settled the acquisition of the foundation villages and the proceeds of the Offer have primarily been used to partially repay debt, providing Arvida with capacity to operate, develop and enhance its portfolio, including through potential further acquisitions.
Arvida’s current dividend policy is to distribute 60-80% of underlying profit per annum, intended to be paid on a quarterly basis. The first dividend is scheduled to be payable for the quarter ending 31 March 2015 and total cash dividends anticipated to be declared in FY16 plus imputation credits are expected to deliver a gross dividend yield of 5.9% (assuming a dividend of 70% of underlying profit) on the Offer price.
Arvida’s chief executive Bill McDonald says the group will advance work on a pipeline of development projects attached to existing villages, including the development of more than 160 new units. In time, the group also hopes to expand beyond the 17 foundation villages.