OFM Investment Group, created out of the demutualisation of the Over 50s Mutual Friendly Society in July last year, has stated it will list on theAustralian Stock Exchange(ASX) in late March.
OFM chief executive Michael Rehak says the listing is not designed to raise further capital for the group but would provide a market for its shares.
Prior to the demutualisation, Over 50’s was the country’s second largest friendly society with $1.2 billion in assets and funds under management.
After the demutualisation it became one of the business operations of OFM which was set up as the holding company of the group’s operations.
At demutualisation, it’s net tangible asset (NTA) backing was $1.29, valuing the group at $51.6 million across the 40 million shares issued to members.
NTA backing at December 31, 2001 was calculated at $1.37 per share pushing the group’s capitalisation to over $54 million and closer to the embedded value of the group of $65.8 million.
This embedded value was calculated by Mercers covers the worth of the group’s business operation particularly that of the funds management business.
Rehak says this part of the business was expected to perform well and OFM would derive strong and revenues from it and the group’s expanding property investment strategies.
“Over 50s Mutual Friendly Society is expected to make a significant contribution to the company’s anticipated after tax earnings of $6.2 million in the current financial year, and to continue to deliver strong returns into the future,” he says.
The demutualisation will also allow OFM to exploit growth opportunities for its established business and expand its property-related investments, Rehak says.
“An ASX listing will return value to our shareholders and allow the Group to invest more favourably on their behalf. On listing, we will be able to draw on much of the group’s capital to grow our existing property portfolio and create new investment opportunities.”
“We will look to do this through the acquisition and development of property-related business and, through them, the development of property related-investment products,” he says.
Rehak says OFM will consider the purchase and management of commercial and industrial property as well possible funding of property development through principal or joint venture participation, with a key area of interest being retirement accommodation.
According to Rehak, this strategy targets both yield and growth in property to take into account the cyclical nature of the asset class.
