Corporate & Financial News
2001 Archive
30/11/01 STRONG INVESTOR SUPPORT FOR SHARE OFFER
Wide Bay Capricorn Building Society Ltd (‘Wide Bay’) announced today that it had closed its offer of resetting convertible preference shares and that the offer had been oversubscribed. Following close of the book build which was managed by Westpac Institutional Bank, which also acted as Arranger and Lead Manager, the margin for the purposes of the dividend to be paid on the resetting convertible preference shares was set at 240 basis points. Therefore the dividend rate on the resetting convertible preference shares is to be 240 basis points over the 90 day bank bill rate.
Wide Bay initially sought to raise $15 million by way of a private placement to sophisticated and professional investors. Due to strong investor demand for the resetting convertible preference shares from both institutional and sophisticated investors, Wide Bay has accepted oversubscriptions of $20 million. The Managing Director of Wide Bay, Mr Ron Hancock, said that he was pleased with the result as it reflected a high level of confidence in the future of Wide Bay.
Mr Hancock said “funds raised by the issue of resetting convertible preference shares will be used to increase Wide Bay’s capital adequacy and repay up to $25 million of subordinated debt”.
Allocation and issue of 350,000 resetting convertible preference shares is expected to take place on 17 December 2001 if the two resolutions, which are to be considered at the general meeting of Wide Bay to be held at 10.00 am on that day, are passed.
The announcement follows Wide Bay’s Annual General Meeting on Tuesday 27 November 2001 where Wide Bay confirmed an unaudited after tax surplus from ordinary activities of $2.79 million for the four months to 31 October 2001, up approximately 45.7% on the $1.90 million result for the four months to 31 October 2000.
Mr Hancock said: “The strong result flows directly from the very robust growth experienced by Wide Bay over recent years and reflects a 34% increase in lending approvals to date. The increased capital adequacy which will result from the issue of the resetting convertible preference shares should allow Wide Bay to continue this strong growth”.
27/11/01 Chairman provides an update at AGM
Mr John Pressler, Chairman of Wide Bay Capricorn Building Society Ltd, in addressing the Society’s Annual General Meeting confirmed strong trading results to for the 4 months ended 31 October 2001.
The Society recorded an unaudited after tax surplus from ordinary activities of $2.79 million compared with $3.36 million for the 6 months to 31 December 2000.
Mr Pressler advised that the Board anticipated an increased dividend this year to in the order of 14/15 cents per share for the half year compared with 12.5 cents for the first six months of last year.
He said these results were a direct flow on of the strong growth experienced by the Society over recent years and confirmed a 34% increase in lending approvals to date.
An amount of $124 million had been approved this year so far with the figures for the current year being boosted by an increased demand from the new home sector as a direct result of the Government’s $14,000 First Home Owners Grant (FHOG). This was also reflected in the Society’s loans approved but not advanced figure increasing to $60 million.
Mr Pressler said the Society’s move into the Sydney and Melbourne market had seen the average loan amount increasing substantially to the point where the Society’s book now comprised 8% of loans in excess of $200,000 with 74% of loans $150,000 or less. He said loans’ arrears for the past 4 years have been relatively consistent and reflected the current low interest rates available.
He advised that the Society was looking to strengthen its presence in the Northern Queensland market, having recently appointed Mr Garth Morgan, the former Chief Executive Officer of Mackay Permanent Building Society to the role of Society’s Northern Regional Manager. His duties will be to develop and expand the Society’s operations - particularly in Mackay, Townsville and Rockhampton.
Mr Pressler said Mr Morgan’s experience and knowledge of these Northern areas will be invaluable to the Society.
15/11/01 CAPITAL RAISING GENERAL MEETING DATE CHANGED
Further to Wide Bay Capricorn Building Society Ltd's (ASX: WBB) announcement on Monday 29 October 2001 that it intends to make offers of issue convertible resetting preference shares - the Society advises that the General Meeting scheduled for 3.30 pm 27th November 2001 to seek shareholder approval for the issue has been postponed.
The Society's Annual General Meeting scheduled for 2.30 pm 27th November 2001 will proceed as advised.
Some changes have been made to the original structure of the proposed convertible
resetting preference sharesissue. The full terms of the convertible resetting
preference shares are set out in the attached Information Memorandum. Accordingly,
shareholders will be asked to approve the issue of up to 350,000 convertible
resetting preference shares at a new General Meeting scheduled for 17th December
2001 at 10.00 am.
As previously advised the Society issue will seek to raise a minimum of $15 million by way of a private placement to sophisticated or professional investors. Wide Bay will retain the right to accept over-subscriptions. The Society's Annual General Meeting scheduled for 27th November 2001 will proceed as advised. Wide Bay Capricorn Managing Director, Mr Ron Hancock said the convertible resetting preference shares will be at an issue price of $100 each and will pay a quarterly dividend benchmarked to the 90 day Bank Bill rate. The margin over the 90 day bank bill dividend rate will be set following a bookbuild to be conducted by Westpac Institutional Bank, who have been retained as Arranger and Lead Manager of the issue. He said the convertible resetting preference share issue represented an efficient form of regulatory capital that will be used to increase Wide Bay’s capital adequacy to take advantage of further growth opportunities and to repay subordinated debt.
Mr Hancock also provided an update on the Society's continuing strong performance reporting an after tax surplus of $2.79million and lending of $103.4million for the four month period year to 31st October 2001.
29/10/01 Wide Bay Announces Capital Raising
Wide Bay Capricorn Building Society Ltd (ASX: WBB) announced on Monday 29 October 2001 it’s intention to issue convertible reset preference shares. Shareholders will be asked to approve the issue of up to 350,000 convertible reset preference shares. The issue will be subject to shareholder approval at a General Meeting on 27 November 2001.
An initial issue will seek to raise a minimum of $15 million by way of a private placement to professional investors. Wide Bay will retain the right to accept over-subscriptions.
The convertible reset preference shares will be at an issue price of $100 each and will pay a quarterly dividend benchmarked to the 90 Bank Bill rate. The dividend rate will be set following a bookbuild to be conducted by Westpac Institutional Bank, who have been retained as Arranger and Lead Manager of the issue.
Wide Bay Managing Director, Mr Ron Hancock said the convertible reset preference share issue represented an efficient form of regulatory capital that will be used to increase Wide Bay’s capital adequacy to take advantage of further growth opportunities and to repay subordinated debt.
Mr Hancock advised the Society was continuing to enjoy strong results with an after tax surplus of $2.04 million for the September quarter and lending of $78 million for the quarter.
4/09/01 Final Results For The Year Ended 30th June, 2001
We are indeed pleased to present this 2000/2001 report on the activities of the Society.
Throughout the year we have experienced further records and have seen the Society develop additional products and services that will enable it to compete with other financial institutions, offering a full range of skilled and competitive financial services to our local communities.
It is however imperative that organisations not only offer services and products, but also generate a level of profitability in size particularly in the recent tight environment that ensures our financial strength for our customers and shareholders. In this regard it is pleasing to announce an after tax profit from ordinary activities of $7,017,082 which represents an increase of 41.3%. During the year the Society received an ex-gratia distribution from the Building Society Fund of $1,782,800 which attracted $606,152 taxation. Our net profit attributable to shareholders of the company after this allocation was $8,150,768, which represented an increase of 66.7%.
Under the provisions of the Harmonised Standards that came into effect on 1 July 2001, administered by the Australian Prudential Regulatory Authority (APRA) the Society was required to generate a general provision for doubtful debts up to .5% of the Society’s risk weighted assets. This provisioning is classified under the APRA standards as Upper Tier 2 capital. The board have decided to allocate a full amount of .5% to this provision even though our provision for bad debts over the years has been insignificant and with all loans insured little likelihood of future major write offs. This amount has been created as an appropriation from retained profits with an amount of $2,297,081 being allocated to comply with the standard. The actual amount written off for the year for bad and doubtful debt expense was $994.
Our strong growth over the years, together with our containment of costs has seen our efficiency ratios at the lowest levels ever. Our cost to income was 61.5%, which outperforms most of the Building Society sector and is more than comparable with many of the regional banks. Our cost to average assets at 1.7% is another significant achievement.
Lending activities for the first six months of the financial year were relatively subdued and we believe a direct result of the activity prior to the introduction of GST. Our lending for the first six months was $111.5 million with total lending for the year $249.2 million. We are anticipating a strong result this year particularly with the introduction of the $14,000 First Home Owners Grant in respect of new dwellings. We have already seen a significant increase in applications this year. Our move interstate particularly in relation to our lending operations has proven very successful with strong figures experienced in Melbourne, Sydney and Adelaide.
Whilst we have expanded our operations interstate our principle focus remains on our retail base throughout provisional Queensland, where we are committed to the development and expansion of these facilities providing a full range of banking and financial services through our local communities.
During the year an additional $162.4 million was funded through our securitisation program and warehouse facility with SG Australia Ltd. Loans funded through this program have this year been excluded from the assets in the statement of financial position. Total assets under management and on balance sheet represent $1.022 billion, an increase of 10.54% over the previous year.
A final dividend of 15 cents has been declared, bringing the total dividend for the year to 27.5 cents. The divided will be paid on 5 October 2001.
Our lenders mortgage insurance captive, Mortgage Risk Management Pty Ltd has now been operating for over 2 years and has shown strong results and contributed to the Society’s overall figures. All new loans are now insured through this captive.
During the year we introduced our website and Internet banking. These facilities together with telephone banking, introduced towards the close of last financial year, has proven very popular and received many accolades from our users particularly in regard to Internet banking.
We are developing our lending products to make them available on the Internet and within a short period we should be able to accept detailed loan applications through that channel. We are currently developing a margin-lending product, which will be particularly available through our customers using our financial planning company’s plans and products.
With respect to our financial planners, we now have four full time advisers and anticipate this increasing during the year.
The introduction of the Society’s MasterCard facility has also received strong support.
There has been an increasing trend over recent years for financial institutions to promote their range of services to customers in a much more focused environment. We are currently in the stages of introducing a new customer service facility, which will provide an expanded database for our customer's use of products and services and will assist our customer service staff in promoting our products.
It is particularly satisfying to note that our Management Team has been able to maintain our operating margin throughout the year, an excellent achievement in the current competitive environment.
Our shares continue to trade steadily on the market, with our share price increasing by approximately $1 over the past year, adding substantial value for our shareholders. The Society currently has 20,003,632 fixed shares on issue.
We are currently intending to raise additional Tier 1 and Tier 2 capital through an instrument similar to irredeemable preference shares. This raising is anticipated to be completed this calender year and will eliminate the need for further fixed shares to be issued for some years. The society has currently $25 million in subordinated debt, which is now classified, as lower Tier 2 capital. The new capital raising will be partly used to clear this subordinated debt, which is no longer considered an attractive capital instrument, because of various restrictions under APRA standards.
The ensuing year will see the Society under further pressure in meeting new legislative requirements in particular the Privacy Act and the Australian Financial Services Bill, scheduled to be introduced this calender year as is new Uniform Stamp Duties Legislation. Whilst these Bills place pressure on the Society and other organisations to comply, they are being introduced after a great deal of consultative discussions and submissions. We are particularly concerned that the possibility under the Financial Services Bill of our base core products such as term deposits are not being excluded from the requirements of that legislation.
We do have in place various committees reviewing the requirements and obligations under the proposed legislative changes.
Whilst we are directed and guided by a very successful Board of Directors, there is no doubt that one of the Society’s real strengths is our Management Team particularly Senior Management, the attitude they display and the enthusiasm and commitment that they apply. We extend our thanks.
We also extend our appreciation of the strong support we have received from shareholders and customers throughout the year.
8/08/01 Wide Bay Capricorn unaudited results for the year ended 30 June 2001
The Directors of Wide Bay Capricorn Building Society Ltd today announced record unaudited results for the year ended 30 June 2001.
After tax profit from the Society’s ordinary operating activities was $6.94 million. During the year, the Society received a distribution from the Building Societies Fund upon supervision being transferred to the Australian Prudential Regulation Authority and after inclusion of this amount, which has been treated as an extraordinary item, the total after tax profit was $8.116 million.
The profit represents an increase in ordinary operating surplus of 41.9% and after allowing for the distribution from the Building Societies Fund 65.8%. Earnings per share have increased to 34.7 cents and it is expected that a final dividend of 15 cents will be paid, bringing a total dividend for the year of 27.5 cents which compares to a total dividend of 22 cents per share in 1999-2000.
The Society has for some years, participated in securitisation programmes and assets under management and on balance sheet at 30 June 2001 totalled
$1.022 billion representing growth in assets of 10.7%. Current projections are that the Society will continue to achieve growth in the 2001/2002 year and that profit growth will continue at strong levels.
These results have been influenced by the Society’s strong lending over the past six months in, not only Queensland, but also Sydney, Melbourne and Adelaide. Loan approvals for the previous six months were generally down on previous years, mainly as a result of the GST timing and general downturn in the housing market. Total loans approved for the year amounted to $249.2million. The Society is currently experiencing a much greater demand for loans than that for the same period last year. The Society has also experienced an increase in lending for new homes as a result of the First Home Owner’s Grant of $14,000.
The Society’s lending mortgage insurance captive, Mortgage Risk Management Pty Ltd, has traded with a surplus for the year and has made a substantial contribution to the Society’s results.
Wide Bay Capricorn has always been very conscious of performance ratios and the efficiencies of operation and management, which have been assisted by the Society’s securitisation programmes.
This aspect has enhanced performance ratios and for the period to 30 June 2001, our cost to income ratios have reduced to 61.5%, reflecting a substantial drop from the previous year and cost to average assets1.7%. These ratios and results have been achieved with the Society’s lending and investment products continuing to remain very competitive. With Wide Bay Capricorn’s retail base and large branch structure these results are strong and reflect our continuing determination to achieve improved efficiencies for our total operations.
Under the requirements of the APRA harmonised standards, the Society has created a general reserve for doubtful debts by way of a transfer of retained profits. The amount of provisioning representing 0.5% of Society’s risk weighted assets was $2,297,081. This provisioning is eligible Tier 2 capital for capital adequacy calculations and will in future years be adjusted as required by the Standards.
We would also advise that the Society has recently acquired a 51% interest in a small lease rental company based in Brisbane. The Society will use this as an opportunity to access the opportunities and operations of that market, with a view of perhaps expanding its lending and financing operations. This will also help us with our policy of providing a broad range of services to meet our wide customer base and to extend our community banking service.
Wide Bay Capricorn’s financial planning division is now established with four full time personnel and further appointments are expected throughout the various branches and areas of our operation in the coming year.
28/05/01 $1billion…and counting!
Wide Bay Capricorn Building Society Ltd recently announced the attainment of $1 billion in assets.
Managing Director Ron Hancock said the milestone was a major achievement for a financial institution with its roots in regional Queensland.
The publicly listed Wide Bay Capricorn is also now Queensland’s 28th largest and Australia’s 256th largest company by market capitalisation.
The Society was formed in 1979, the result of an amalgamation between the Bundaberg-based Burnett Permanent Building Society and the Maryborough Permanent Building Society – societies that had been established in the 1960’s. The Gympie and North Coast Building Society and the Gladstone-based Port Curtis Building Society were also amalgamated in the 1980’s.
About $800 million of Wide Bay Capricorn’s $1 billion is tied up in housing loans.
Mr Hancock said Wide Bay Capricorn, through its predecessors, was created to provide some competition to banks that, in the 1960’s, required a deposit of about 25% for home loans.
Wide Bay Capricorn provided home loans from 5% deposit – a market the Society continues to pursue today.
Mr Hancock said the Society’s push towards the $1billion mark had been boosted by the success of its expansion into the Sydney, Melbourne and Adelaide home loan market – a move achieved using brokers and without the need to spend large amounts of money setting up branches.
He said that while Wide Bay Capricorn’s interests went well beyond regional Queensland, the Society had not forgotten the many people who had played a role in its success.
The Society operated 29 branches and agencies in Queensland, employed over 160 people and made a major contribution to the communities in which it was represented.
Mr Hancock said a substantial number of former bank customers continued to move to building societies like Wide Bay Capricorn in a bid to escape exorbitant fees.
Mr Hancock said he recognised the part investors, borrowers and staff had played in the Society’s growth.
