Spearhead stock in big demand in vendor share placement SPEARHEAD

Posted On Monday, 05 May 2003 02:00 Published by
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The JSE Securities Exchange-listed property loan stock company, has completed a highly successful vendor share placement in which nearly R100 million worth of Spearhead stock was subscribed for - although only just under R40 million was available for placement.

The JSE Securities Exchange-listed property loan stock company, has completed a highly successful vendor share placement in which nearly R100 million worth of Spearhead stock was subscribed for - although only just under R40 million was available for placement.

"We were almost 300% oversubscribed," said Mike Flax, CEO of Spearhead. "This indicates clearly that interest in, and demand for, Spearhead's scrip from both institutional and private investors is picking up. It seems that, at last, Spearhead's uninterrupted growth in both profit and distributions over seven consecutive half year periods has begun to be noticed - as, indeed, we feel it deserves to be."

Among new institutional investors to subscribe to Spearhead stock are: l Investec Property Equity Unit Trust, l Standard Bank Property Equity Trust, l Redefine Income Fund, l M Cubed Property Unit Trust (managed by Catalyst), and l certain HSBC and Investec Private Client portfolios. Spearhead, said Flax, had always wanted institutional shareholders of this calibre because they tend to be long-term investors and, equally important, because they can be expected to support Spearhead's growth plans by taking scrip in future share issues.

A year ago Flax said that he expected to be able to triple the company's R350 million property portfolio within five years - and to help achieve this, he said, he would be trying to attract additional institutional investors to the company.

Spearhead shares were this week trading at around R10.15. A further improvement, said Flax, is likely because the profit for the year ending June 2003 will almost certainly be ahead of most analysts' forecasts. Thereafter, he said, further strong growth in income is on the cards because Spearhead, which recently added a further R170 million worth of property to its portfolio, is also involved in several major developments which will impact favourably on the bottom line in 2004/2005.

The company, said Flax, is now the largest landlord in Cape commercial property after those in the life insurance and banking sectors. It recently bought the 25 000m2 Ottery Hypermarket, the office complex 129 Beach Road, Mouille Point (in a joint venture with Faircape) and Plum Park, the office complex in Plumstead.


Publisher: Weekend Argus
Source: Weekend Argus

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