City Beat: Brisbane developer plans $10m float; End of the line for ATEC Rail Group?

Brendon Ansell arrived in Brisbane in 1995 with $60 in his pocket. Now he’s a millionaire with plans to take his company public.

Velocity’s Brendon Ansell will retain a 32 per cent stake in the company.

VELOCITY TAKES OFF

He arrived in Brisbane in 1995 with just $60 in his pocket.

South African native Brendon Ansell was 19 at the time and didn’t have much success at first.

Knocked back from a job at fish and chips shop and Queensland Rail’s tuckshop, Ansell eventually got a job in a bed factory.

Later, he worked as an investment banker in London and admits that his cricket-mad alcoholic boss hired him mainly as a drinking buddy and someone to talk sport with.

But Ansell’s fortunes have improved substantially since then.

His Velocity Property Group aims to list on the ASX in mid-January after raising $10 million for working capital and to pay down debt.

The Bulimba-based company, which launched in 2008, now has seven residential projects in the pipeline across Brisbane and the Gold Coast.

Valued at $113 million, they will be rolled out over the next two years.

Given the saturated status of the unit market, though, Ansell needs a point of difference and he thinks he’s got one.

He’s targeting the empty-nester market looking for more luxurious “boutique’’ apartments.

It’s highly debatable but Ansell claims he focuses on “low density, high quality’’ suburbs because they “generally don’t have downturns’’ thanks to the higher number of owner occupiers. Velocity’s financial picture is mixed, showing a $1 million net profit last year but net losses of $526,440 and $394,953 in 2015 and 2014 respectively.

There are also a few related party deals revealed in the fine print of the prospectus. These include $216,225 in project management fees paid to entities associated with Ansell.

More than $214,000 in fees and loans were also paid to Singapore-based commercial manager Philip Raff. Ansell, who only earns a modest $180,000 salary a year, plans to keep plenty of skin in the game.

Velocity will have a market capitalisation of $71.7 million when it floats and Ansell will retain 32 per cent stake in the company, down from 38 per cent now.

END OF THE LINE?

It sure looks like the end of the line for the ATEC Rail Group. Or is it?

The Brisbane-based outfit told investors in recent correspondence that its long-time American financial backers, EMG, may not “fund a future capital call’’.

“As there is no imminent project to be financially closed, the Board resolved to commence, on 1 November 2016, the orderly wind down of the consolidated group’s operations,’’ it said.

But an ATEC spin doctor was adamant yesterday that it was all systems go for the company, which merely planned to cut loose some of its employees.

“There’s no story here,’’ she insisted.

“All we’re doing is losing a few staff. It’s just simply in response to tough market conditions and greenfield opportunities in Australia.

“We’re continuing to work on all our project opportunities in Queensland.’’

ATEC, of course, was the brainchild of rail-mad Everald Compton nearly 20 years ago.

He stepped down as a chairman recently and still consults for the group, which has banged the drum incessantly for an inland rail corridor.

Compton told City Beat yesterday that the wording merely reflected new disclosure requirements under Corporations Law that revenues may not eventuate and jobs might be at stake.

“I’ve got no doubts that the company is going to proceed and we’re just being honest with staff and shareholders,’’ Compton said.

“I’m not panicking in any shape or form.

“We’re just being honest with everyone.’’