Britania PCL prices Thai IPO at top of range to raise around 2.65 billion baht

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Britania PCL has priced its initial public offering (IPO) on the Stock Exchange of Thailand at 10.50 baht a share, the top end of its 10 baht to 10.5 baht indicative range, in an deal set to raise as much as 2.65 billion baht, according to a filing to SET Friday.

The offering was for up to 252.65 million shares, representing up to 29.6 percent of the total shares, while parent company Origin Property PCL will retain 70 percent of Britania post-IPO, the prospectus said, according to a translation.

Thailand-listed Origin Property is a real estate developer, focusing on condominiums along the rail mass transit system in Bangkok and its vicinity and on providing real estate-related services, such as procurement services for condominium tenants and project management services, the prospectus said. Origin is 61.34 percent owned by Jaroon-ek family group, the translated prospectus said.

Britania’s focus

Britania focuses on developing low-rise residential properties, including detached houses, duplexes, townhomes and townhouses, operating under four main brands: Belgravia, Grand Britannia, Brittania, and Brighton, the prospectus said, according to translation.

As of end-September, the company had closed two projects with a project value of around 2.03 billion baht, and there are 13 projects in the process of being sold and transferred with a total project value of around 17.55 billion baht, the prospectus said. Six projects are under development worth around 4.3 billion baht, and there are nine future projects with a project value of around 10.8 billion baht, the prospectus said.

For the first nine months of 2021, Britania reported total income of 2.81 billion baht, compared with full-year 2020’s total income of 2.34 billion baht, the filing said.

Britania posted January-to-September net profit of 452.3 million baht, compared with 290.7 million baht for the year-ago period, and 348.72 million baht for full-year 2020.

Outlook

Britania noted its compound annual growth rate (CAGR) over 2018-2020 was around 113 percent, mainly due to growth in housing development as the city has grown as public utilities, including roads, expressways and trains, have expanded. Public and private investments have also spread in suburban communities and connecting points between Bangkok and major economic zones in the country, Britania said.

“Coupled with rising condominium prices, including the epidemic situation of the Covid-19 virus, consumers have increased demand for low-rise housing, because consumers want housing that is private and proportional to living,” Britania said, citing data from the Agency for Real Estate Affairs as showing the share of low-rise housing sales in the market has increased to 60 percent of total residential sales.

Britania said it has adjusted its operating model due to Covid to use more aggressive strategies via online platforms to promote said.

“This strategy has a lower cost than other forms of marketing, as well as being able to communicate with target customers quickly and with high efficiency, enabling the company to reduce the proportion of sales expenses compared to income from real estate sales,” Britania said. 

Use of funds

According to the prospectus, at least 1.8 billion baht of the proceeds will be used to pay off loans, 450 million baht to 550 million baht will be used to finance project development and/or business expansion, and 36.7 million baht to 213.3 million baht will be used as working capital.

The dividend policy for Britania will be a 40 percent payout rate, the prospectus said.