Fleetwood Corporation Limited (ASX: FWD), a caravan and accommodation village manufacturer, has seen its share price soar 20% to $1.745.
The company announced today that the Western Australian Housing Authority (WAHA) had purchased the Osprey village in Port Hedland from Fleetwood for $62.2 million. The company will continue to manage the village and receive an income stream for a term of 14 years.
Osprey village is around 80% occupied after being commissioned in March to May 2014.
This is great news for Fleetwood. The deal reduces the company's net debt to zero, and gives the company an ongoing income stream for many years.
Fleetwood still faces challenges with its Searipple Village in Karratha, although executed an agreement with Rio Tinto Limited (ASX: RIO) earlier this year so Rio could use up to 804 of the 1,326 rooms for up to 34 months.
The company may be on the comeback trail in another area too. Fleetwood signed a deal with Gateway Lifestyle Group (ASX: GTY) to become their exclusive provider of manufactured housing for Lifestyle's manufactured housing estates (MHEs) in Queensland and NSW.
It might be time to take a closer look at Fleetwood. Despite today's 20% rise, shares may still be cheap.
