Safe CEO a daredevil in private
By | theage.com.au | 22 May
The private life of Louis Milkovits is surprisingly risky. The chief executive of Melbourne builder AVJennings flies light planes, builds rockets and is an avid motorcyclist. Not that his family is bothered.
"The funny thing about motorbikes is when your wife is your girlfriend, she loves coming for a ride," says Milkovits, 58. "But when your girlfriend turns into your wife, she has other ideas. And the kids are too embarrassed to be hanging around Dad's waist."
In public, however, Milkovits is notoriously averse to risk. As head of one of Australia's best-known housing developers, he was heavily criticised for not buying during the rush for land in 2005 and 2006.
"Our land bank ran down from about 9000 lots to about 7000 lots because we were not prepared to pay those prices."
Milkovits took charge of AVJ in 1999 after heading the Defence Housing Authority. He is the eldest son of Hungarian World War II refugees and says his upbringing has made him resourceful and hard-working.
Born in Germany, Milkovits grew up mainly in the semi-rural village of Uriarra, near Canberra. His neighbours were Spanish, Italian, Finnish and British immigrants. Life was cheerful, multicultural and cold.
"I grew up thinking multiculturalism was quite normal - everyone spoke different languages, we ate Italian food and sang Spanish love songs. It was also good to grow up in the country because it makes you very resourceful. The only thing with growing up in Uriarra (was) that I figured out later in life that it didn't snow everywhere in Australia every winter."
This mix of hardiness and cheerful optimism is perhaps influencing Milkovits' attitude towards residential property in Australia. AVJennings' land bank last year increased by 40% to 10,500 lots and Milkovits wants to raise more money to take advantage of the market slump. "I have not seen opportunity of this level for a very, very long time." He says cheap land will come from "distressed" sellers hit by the credit crunch, from government releases, and from farmers who trust the brand.
"The brand name has huge significance. People believe in us; they offer their land to us."
The company has come a long way since 1932, when Albert Victor Jennings took out a £700 mortgage on his family home to build 13 brick houses in Caulfield. The business flourished until 1980 when a shift into commercial property ended in disaster with a market crash.
Milkovits took the reins in 1999 after parts of the company were bought by Jack Chia's NSW business, Long Homes, and Singapore's SC Global.
He agrees the resilience of the brand is despite its history.
"Be it luck, or be it the circumstance, or be it the cycle, there is a strong opportunity in the name."
Milkovits this week announced a $51 million 1-for-3 rights issue, offering shares at 67�. He said majority shareholder SC Global, with 41%, had committed to its share.
But the rights issue has reignited the wrath of dissident shareholder Guinness Peat Group, which last year failed in its attempt to get representation on the AVJ board, and has blamed Milkovits for the company's share price slump. GPG director Gary Weiss said AVJennings was a "serial underperformer" that could not manage assets effectively.
GPG owns about 9% of AVJ. A GPG insider said it would not be happy until Milkovits was removed. There are also rumours that major shareholder SC Global is in financial strife.
Milkovits says he's bearing the attacks well. "If I was a lemming and reacted every time someone said something bad about me, I would have run for cover a long time ago."
AVJennings shares have fallen about 40% since December, when Centro Properties announced its debt debacle. GPG is critical of AVJ's gearing: net debt at December 31 was about $220 million and its equity value yesterday was about $200 million.
Milkovits is far from worried. He says the company is on the "ascendancy" and that its debts are not short-term.
But while Milkovits wants the market to wait and watch as the company realises the value of its large land holdings, there are those who would like to reap their profits earlier.
Milkovits jokes that he's in the midst of a "benign midlife crisis", but it has nothing to do with work, and he seems to love domestic life.
Food and family dinners are recurring topics of conversation, and when the two combine, he's in heaven. "Preparing dinner together is just bliss."
So is he a daredevil or a Poindexter? "People say I'm very conservative. But you should see me on the dance floor."
First published by TheAge.com.au on May 22 2008
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