Strong demand for Briscoe float

By Phil Boeyen, ShareChat Business News Editor

Tuesday 20th November 2001

Briscoe's initial public offering looks assured of success before the official offer has even opened.

The group registered its prospectus and investment statement on Monday for 40 million shares at $1.00, with the offer due to open officially on Thursday.

However in a market deprived of IPOs this year the shares are already as good as sold, supported by the fact that there is no public pool for shares.

J B Were is the lead broker for the issue and manager of private stockbroking, John Cobb, says the quality of the business is attracting investors to the stock.

"The company is also a very interesting growth story with its Rebel Sport stores and it's the only real IPO in the market this year," he says.

Mr Cobb says the issue is also a relatively small one with only 35 million shares available to institutional and retail investors. The other 5 million shares have been set aside for Briscoe directors, employees and business associates.

J B Were has also put a cap on the number of shares which retail investors can apply for of 20,000.

Briscoe is also selling 5% of its stock to Australian-listed retailer Harvey Norman and its founder Gerry Harvey. Mr Harvey will be joining the board as a non-executive director.

Briscoe Group, comprising the Briscoes Homeware and Rebel Sport chains, is forecasting significant growth for the next couple of years.

The company says operating revenue says growth to the end of January 2002 should be around $252 million, up from $221 million previously. Revenue is expected to jump further, to around $266 million, by the end of January 2003.

Profitability is forecast to grow from $12.5 million in the 2001 year, to $15.1 million for 2002 and $17.7 million for 2003.

All the forecasts are on the assumption of no new stores being opened.

Proceeds from the company's IPO will be used to repay a $9 million shareholder loan and to expand and modernise the group's retail outlets. Some money will also be used to "provide greater flexibility to pursue and fund other expansion opportunities."

Briscoe is expected to list on the NZSE on December 14.

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