Winton Property - IPO

[Sideshow Bob]

From Business Desk:

Winton delivers early Christmas present to NZX in $350m IPO (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=9655551cbd&e=3b6f9185d3)Winton Property is pressing ahead with plans to raise as much as $350 million in an initial public offering that will get in just before the Christmas break.
The residential property developer settled on a dual-listing on the NZX and ASX to help fund its expansion of high-end retirement villages (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=10df5175e5&e=3b6f9185d3) and has secured a $200m commitment from Macquarie Asset Management. It has another $100m from high net worth investors and will invite institutional investors to bid for the remainder.

Read on » (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=97187be05e&e=3b6f9185d3)

[Waltzing]

Well if you going to invest in this you might as well also look at the US home builders..

But rates are going up and Dan Niles is going against the market saying SP down for next year.

[Mr Slothbear]

Julian cook as executive director will make this very interesting watching.

[777]

Right under the flight path of a runway at Ardmore aerodrome.

[Waltzing]

whatch Toll brothers.

[LaserEyeKiwi]

Pretty much marks the top of the NZ residential property market one would bet

[tango]

Pretty much marks the top of the NZ residential property market one would bet

Yep, that's the way it seems. They have an interesting concept but I am not prepared to risk it

[Balance]

Pretty much marks the top of the NZ residential property market one would bet

https://www.stuff.co.nz/life-style/homed/housing-affordability/300467800/mega-landlord-says-wind-change-in-market-could-see-prices-fall-20-per-cent

The housing market is on the precipice of a wind change that could see prices fall up to 20 per cent, one of the market’s biggest players claims.

Mega landlord Matthew Ryan says he hasn’t seen such a sudden shift in buyer sentiment, or such a convergence of factors that will reduce house prices, since the Global Financial Crisis.

[Habits]

You not biased at all eh,, not half. Yes you are quoting someone else and everyone is entitled to their opinion

[kiwical]

Right under the flight path of a runway at Ardmore aerodrome.


Ah well. Hearing aids out at bedtime anyway. Shouldn't bother too many, and excite the retired plane spotters :)

[Sideshow Bob]

Interesting article on BusinessDesk:

Winton Land – The tortoise or the hare? | BusinessDesk (https://businessdesk.co.nz/article/opinion/winton-land-the-tortoise-or-the-hare)

Comparison to CDL, as the companies are similar sizes, total assets only about $30m difference. Winton alot more debt. Winton's market cap after IPO will be $1.15B vs $312m for CDL, but not compariable in terms of NTA per share.

[LaserEyeKiwi]

Interesting article on BusinessDesk:

Winton Land – The tortoise or the hare? | BusinessDesk (https://businessdesk.co.nz/article/opinion/winton-land-the-tortoise-or-the-hare)

Comparison to CDL, as the companies are similar sizes, total assets only about $30m difference. Winton alot more debt. Winton's market cap after IPO will be $1.15B vs $312m for CDL, but not compariable in terms of NTA per share.

Yes that article makes it startlingly clear how overvalued the Winton IPO is. I much prefer CDL for residential exposure.

[Balance]

ASB Housing Update:

REINZ Housing Data November 2021: Shifting through the gears

November data allow more confidence in the fact the housing market has turned

Housing supply is now, finally, rising to meet demand

Supporting our forecasts for a sharp slowing in house price inflation next year

[Balance]

Auction clearance rates dropping like a stone :

https://www.interest.co.nz/property/113751/sales-rate-barfoot-thompsons-auctions-halves-over-last-two-months-surge-new

[Sideshow Bob]

I do laugh at the Winton ads on TV. Not about selling sections, all about their IPO......

[sb9]

Auction clearance rates dropping like a stone :

https://www.interest.co.nz/property/113751/sales-rate-barfoot-thompsons-auctions-halves-over-last-two-months-surge-new

The party has to end somewhere, right. Have noticed quite a few homes in the last few weeks going from auction to price by negotiation and few that have dropped their asking price by about $100k.

[Balance]

The party has to end somewhere, right. Have noticed quite a few homes in the last few weeks going from auction to price by negotiation and few that have dropped their asking price by about $100k.

Was in the news over the weekend just how slow the auction market has become for existing homes.

Article about an Auckland couple went to an auction to bid on a home in Te Atatu - they were very surprised to be the only bidder for the property and that's after the first 15 auctions ahead of their property passed. They got it for $925,000 which was well below what they expected to pay of >$1m.

New homes are still going strong due to investors' interest apparently.

[winner69]

Was in the news over the weekend just how slow the auction market has become for existing homes.

Article about an Auckland couple went to an auction to bid on a home in Te Atatu - they were very surprised to be the only bidder for the property and that's after the first 15 auctions ahead of their property passed. They got it for $925,000 which was well below what they expected to pay of >$1m.

New homes are still going strong due to investors' interest apparently.

ANZ had this chart re auction clearing rates and Akl house prices .... under the heading fasten your seatbelts

[Balance]

ANZ had this chart re auction clearing rates and Akl house prices .... under the heading fasten your seatbelts

Scary chart, W69.

Wonton has called the top of the market, I think.

[Sideshow Bob]

Auckland the bellweather for the country?

Or Aucklanders trying to flee Auckland for the provinces.....

[LaserEyeKiwi]

I do laugh at the Winton ads on TV. Not about selling sections, all about their IPO......

100% correct.

[Lola]

I do laugh at the Winton ads on TV. Not about selling sections, all about their IPO......

And I see that F/bar were part of the selling group...

[Sideshow Bob]

From Business Desk:

Winton v Kāinga Ora, housing minister dragged into spat (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=798764152f&e=3b6f9185d3)Executives of private property developer Winton met with housing minister Megan Woods earlier this week after crown agency Kāinga Ora stonewalled its $10 billion Sunfield housing and community development in South Auckland.
The meeting, held on Monday, follows complaints to Woods by Winton chief executive and founder Chris Meehan about Kāinga Ora spending taxpayer’s money (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=7e00294f92&e=3b6f9185d3) “overbidding” against private developers.

Read on » (https://businessdesk.us20.list-manage.com/track/click?u=786ac0b2dc4f2240875208882&id=7ddfd20a02&e=3b6f9185d3)

[Sideshow Bob]

Updated L&Q Notice - Winton Land Limited - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/384901)

ISTING AND QUOTATION NOTICE: NZX MAIN BOARD WINTON LAND LIMITED (“WIN”) ORDINARY SHARES
Company: Winton Land Limited
Issuer Code: WIN
ISIN: NZWINE0003S1
Short Name: Winton
Registered Office: Level 4
10 Viaduct Harbour Avenue
Auckland, 1010
Website: https://www.winton.nz/
Telephone Number: +64 9 377 7003
Financial Year End: 30 June
Nature of Business: Winton is a residential land developer that specialises in developing integrated and fully masterplanned communities. To date, Winton’s primary business has been developing and selling ‘lots’ of residential land. In some cases, Winton also provides land and building packages, where Winton contracts with specialist builders to provide a home on the land it is selling. Similarly, where the market or site dictates, Winton develops apartment buildings as part of its masterplanned developments.
Directors: Chris Meehan (Chair and Chief Executive Officer)
Julian Cook (Executive Director and Director of Retirement)
Michaela Meehan (Executive Director)
David Liptak (Non-Executive Director)
Anna Molloy (Independent Non-Executive Director)
Glen Tupuhi (Independent Non-Executive Director)
Type of Listing: Initial Public Offering (IPO)
Quoted Securities at Completion of Offer: Minimum Application Amount (Chairman’s List Offer): 296,613,736 shares
The minimum Application amount is 258 Shares
Reference Price: $3.8870 per Share
Tick Size: $0.01
Auditors: KPMG
Solicitors: Chapman Tripp
Registrar: Link Market Services New Zealand
Settlement Status: NZCDC Settlement System
Offer Opens: Thursday, 9 December 2021
Offer Closes: Sunday, 12 December 2021
Allotment Date: Friday, 17 December 2021
Earliest Mailing of Holder Notices: Monday, 20 December 2021
Expected Date of Commencement of Trading on the NZX Main Board: Friday, 17 December 2021
Expected Time of Trading on the NZX Main Board: 2pm NZT

[hyinvest]

The party has to end somewhere, right. Have noticed quite a few homes in the last few weeks going from auction to price by negotiation and few that have dropped their asking price by about $100k.

Thanks for sharing this article. Nice comparison. I wonder what are the references for Winton's financials in the article?

[Habits]

Holding up so far, just 3 percent off issue price. I would love to be a shareholder and see where this goes. Totally new development proposition to what Auckland is familiar with which makes it exciting and adds to the risk. I wish them well.

[Sideshow Bob]

Winton Announces First Half FY22 Results - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/387852)

Residential land developer Winton Land Limited (“Winton”) is pleased to announce its interim results for the half-year ended 31 December 2021 (H1 FY22).

Financial Highlights
• Revenue $44.3 million
• Gross profit $19.3 million
• Gross profit margin 43.5%
• Earnings before interest tax depreciation and amortisation (EBITDA) $2.8 million
• Pro forma earnings before interest tax depreciation and amortisation (Pro forma EBITDA) $8.8 million
• Profit after income tax $1.3 million
• Pro forma profit after income tax $6.0 million
• Total debt $130.0 million
• Net cash $250.2 million
Pro forma adjusts for one-off listing and offer costs.

Business Highlights

• Continued to grow pre-sale book, significantly outpacing realised sales.
• $51 million in gross settlements, average revenue per unit $346K
• $119 million in gross new sales in H1 FY22
• $720 million of gross pre-sales as at 31 December 2021
• Delivered 128 units, including residential lots, dwellings and townhouses
• Launched multiple new projects throughout New Zealand
• Launched proposal for Sunfield
• Landbank yield of up to 7,314 units, including 917 retirement living units

[LaserEyeKiwi]

Just $1.3m NPAT!

Curious why people are valuing this puppy at $1 Billion (with $120m in net cash), when something like CDL is generating $30 million a year reliably and only has a market cap of $310 million (including ~$75 million in net cash)

Also Winton only has $423 in Net assets, so NTA isn’t a reason for a $1 Billion valuation.

Are Winton profits supposed to be spectacular in the 2nd half?

I see their forecast for 2023 is just $8.8m in net profit.

So currently trading at 100x its 2023 earnings!

[Sideshow Bob]

Just $1.3m NPAT!

Curious why people are valuing this puppy at $1 Billion (with $120m in net cash), when something like CDL is generating $30 million a year reliably and only has a market cap of $310 million (including ~$75 million in net cash)

Also Winton only has $423 in Net assets, so NTA isn’t a reason for a $1 Billion valuation.

Are Winton profits supposed to be spectacular in the 2nd half?

I see their forecast for 2023 is just $8.8m in net profit.

So currently trading at 100x its 2023 earnings!

You'd think property has been on a huge downer.....

Goes back to Brian Gaynor's excellent article in mid-December comparing the two. The tortoise and the hare.....I know which one I'd rather be a shareholder of.

[LaserEyeKiwi]

…
I see their forecast for 2023 is just $8.8m in net profit.

So currently trading at 100x its 2023 earnings!

https://www.nzx.com/announcements/387946


With regards to Winton’s H1 Y22 results announced yesterday, the FY23 profit guidance in the announcement and Financial Statements should have read $98.8 million.

That is quite the typo to have in your earnings result!!! Did no one bother to proof read it???

But clearly explains their market valuation now sitting at ~10x 2023 earnings guidance.

[hyinvest]

So based on WIN's FY22 profit guidance, their expected ROE will be around half CDI's ROE.

[Recaster]

My take:

https://recastinvestor.substack.com/p/basic-analysis-winton-land-winnzx

[Recaster]

A look at the latest (annual) accounts:

https://recastinvestor.substack.com/p/update-winton-land-winnzx-wtnasx

[mfd]

Winton are making friends again.

https://www.stuff.co.nz/business/130223791/property-development-company-winton-takes-kinga-ora-to-court-over-refusal-to-fasttrack-4b-carless-neighbourhood

Given their share price performance and the recent large falls in property prices, you'd think they would have enough on their plates already.

[LaserEyeKiwi]

They seem to enjoy filing baseless legal challenges as a form of PR

[Habits]

Winton are making friends again.

https://www.stuff.co.nz/business/130223791/property-development-company-winton-takes-kinga-ora-to-court-over-refusal-to-fasttrack-4b-carless-neighbourhood

Given their share price performance and the recent large falls in property prices, you'd think they would have enough on their plates already.

A car-less neighbourhood in papakura ... where do they get such amazing ideas other than the developers guide to minimising costs

[audiav]

You'd think property has been on a huge downer.....

Goes back to Brian Gaynor's excellent article in mid-December comparing the two. The tortoise and the hare.....I know which one I'd rather be a shareholder of.

Wow, when will this stop?

[Sideshow Bob]

https://www.nzx.com/announcements/406266

Winton advises an update to previously provided FY23 guidance for the 12 months ending 30 June 2023. The change to guidance is driven by delivery delay of pre-sold projects attributable to heavy January rainfall in the North Island. As a result, we have already lost 83% of this summer’s earthwork season, incurred water damage to pre-ordered supplies and expect supply chain implications to the industry.

For FY23, we now expect net profit after tax[1] of between $72.4 million and $82.4 million. This compares to the FY23 forecast provided at the time of IPO of $98.9m. The revised guidance remains above the FY22 declared net profit after tax of $31.7m. Any net profit after tax not realised in FY23 is expected to be realised in FY24, as these profits are largely pre-sold and there are no sunset dates in relation to the delayed units that would put this at risk. The revised FY23 guidance remains subject to no further material adverse changes or unforeseen events.

Winton CEO Chris Meehan said, “Before the impact of the severe weather, the business was on-track to achieve the FY23 IPO forecasts. Our high degree of committed pre-sales has served us well in this weaker housing market. FY23 is expected to be a record year for Winton as we deliver more land lots and homes than we ever have before. Going into the remainder of the year and into the next, we are in a strong financial and market position to continue to deliver our pre-sold product, create ongoing revenue opportunities and use softer market conditions to our advantage for further land acquisition and construction delivery.”

Winton’s balance sheet remains debt free, with cash and cash equivalents of $89.0 million as at 31 December 2022. Our full interim results and commentary will be provided to the market on 22 February 2023 before the NZ stock exchange opens. There is a conference call for investors and analysts scheduled for 11:00 am (NZT) on the day of results; details are available at Winton interim results conference call details.

[1] Excluding any unconfirmed fair value revaluation of investment properties for FY23.

[Sideshow Bob]

https://www.nzx.com/announcements/407099

Winton (NZX: WIN / ASX: WTN) is pleased to release its interim results for the six months ending 31 December 2022 (H1 FY23) with revenue of $85.1 million, a gross profit margin of 46.3%, earnings before interest, tax, depreciation and amortisation (EBITDA) of $49.7 million and $34.5 million profit after tax.

Chris Meehan, Chair and CEO of Winton said: “This is a fantastic result for the half year. We settled 219 units(1) delivering $85.1 million revenue which was 91.9% higher than H1 FY22 and delivered $34.5 million profit after tax.”

“We deliver these results at a time of a softer housing market, high inflation and increasing interest rates where our pre-sales from prior years have done their role to provide security of income into the future. As at 31 December 2022, pre-sales were $565.8 million(2).”

[Habits]

Rich-list businessman and Winton Land CEO Chris Meehan takes on Prime Minister Chris Hipkins in advertising campaign - Media Insider interview
https://www.nzherald.co.nz/business/rich-list-businessman-and-winton-land-ceo-chris-meehan-takes-on-prime-minister-chris-hipkins-in-ad-campaign-media-insider-interview-with-shayne-currie/7JNAANCWVBC3PDY2RIS2WDVEGQ/

CEO is on the offensive

[Raro]

I'm surprised these guys don't get more chat. A litigious bunch, no doubt. But they hung their hat on that being a key part of their strategy pre IPO so no surprises there..

Surely given a significant Government underwrite ensuring a decent chunk of their future earnings till 26/27plus a move into the lucrative wealthy boomer market and some pretty interesting stuff happening on the periphery (which they seem to keep pretty quiet) this would be one to take seriously?

[Sideshow Bob]

https://www.nzx.com/announcements/426446

Winton (NZX:WIN / ASX:WTN) is pleased to release its interim results for the six months ending 31 December 2023 (H1 FY24) with revenue of $85.6 million(1), earnings before interest, tax, depreciation and amortisation (EBITDA) of $14.2 million and $9.7 million profit after tax.

[LaserEyeKiwi]

What a stunning collapse.

Annualize this 6 month result and the stock is trading at 35x earnings.

[winner69]

What a stunning collapse.

Annualize this 6 month result and the stock is trading at 35x earnings.

At least npat +ve …unlike some property companies

[LaserEyeKiwi]

At least npat +ve …unlike some property companies

Like a lot of property companies, I figured the Winton result was dragged down by negative property re-valuations - but no it’s the opposite! They had a positive investment revaluation upwards!!

The underlying operational result is really depressed. margin collapsing (less revenue, but much higher cost of sales!).

14956

[Balance]

https://www.nzx.com/announcements/426446

Winton (NZX:WIN / ASX:WTN) is pleased to release its interim results for the six months ending 31 December 2023 (H1 FY24) with revenue of $85.6 million(1), earnings before interest, tax, depreciation and amortisation (EBITDA) of $14.2 million and $9.7 million profit after tax.

NTA of $1.73 vs sp of $2.47.

Earnings have indeed collapsed (EBITDA down 71%!) despite sales only dropping 7.7%.

Looks like they have overpaid for land and have suffered horrendous costs over-runs at a time when section prices have dropped substantially.

And company has gone from no debt to $63.3m in borrowings to fund land & property purchases - why not use the cash they have at hand?

[Muse]

I've had the good fortune to visit the new ayrburn hospitality precinct a few times. Was blown away - truly no expense spared. A few early teething issues on staff but assume that will get ironed out over time. Was a really cool experience and should get better as only partially open. But the maintenance and running costs must be sky high I can't imagine how it will break even on the hospitality side. A must do if ever in the region.

[beetills]

I wonder how much they spent on taking CDI to court?

[LaserEyeKiwi]

Just checked out yesterday’s post earnings trading in Winton.

16 shares.

Not 16 thousand.

16 shares.

$39 worth.

[Sideshow Bob]

Just checked out yesterday’s post earnings trading in Winton.

16 shares.

Not 16 thousand.

16 shares.

$39 worth.

Not sure what went through on the ASX yesterday, maybe around 4,000.

Average daily volume over the last 90 days has been 353.

Not 353 thousand.

353 shares