Debt collector debuts on ASX and NZSE

By Nick Stride

Friday 30th June 2000

Shares in RMG, the receivables management group backed into the former Frontier Petroleum, relisted on the New Zealand and Australian stock exchanges yesterday at 32c, equal to the placement price.

The opening price values RMG at $156 million, about a fifth of the market value of rival Baycorp, but RMG is expected to grow quickly.

Sharebroker DF Mainland, whose director Stuart Cairns is also chairman of RMG, expects the company to report a $A3.2 million ($4.1 million) profit this year. After adjusting for goodwill writeback the broker is forecasting bottom-line profits of $A8.1 million for 2001, $A11.4 million for 2002 and $A14 million for 2003.

A DF Mainland research report says RMG has around 20% of the Australian market and 12% of New Zealand.

The Australian market is worth around $A250 million a year and is expected to grow to reach $A500 million in 2005.

Since abandoning oil and gas exploration Frontier, now RMG, has bought 20 receivables management businesses in New Zealand and Australia for $A85.6 million, paid in a combination of cash and RMG scrip.

It recently raised $A25 million from a placement of shares with institutions at 25Ac a share.

DF Mainland said rolling up so many companies at once - "at first glance, a recipe for disaster" - would be a success because, among other things, 65% of RMG's revenue would come from the top three companies.

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