Friday 25th July 2014
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Shares in Scales Corp increased 0.6 percent on their NZX debut in the fruit and vegetables logistics company's $148 million initial public offer.
The shares first traded at $1.61, just above the $1.60 IPO price, valuing the company at about $225 million. Some 1.37 million shares of the company's 139.8 million shares on issue changed hands. Of the $148 million raised, $30 million was new capital, while private equity firm Direct Capital sold into the offer, reducing their stake to 20 percent from 84.2 percent. The firm held the shares with co-investors ACC and the New Zealand Superannuation Fund.
The IPO is the latest in a series of floats, which have primarily been tech-based companies seeking growth. Portable measuring device maker ikeGPS Group was the latest growth company to list, with its shares slumping as much as 18 percent on debut from its $1.10 offer price. IkeGPS's shares recently traded at 99 cents.
Scales said it will use new capital to fund "flexibility for the future expansion of its business" as well as pay down its debt, and after the float, expected its average prospective net debt to be $44.1 million.
The fruit logistics company forecast net profit to fall to $15.9 million in 2014 from $20.4 million last year, before a rise to $20.8 million in 2015. It expects to pay a dividend of between 9.4 cents per share and 9.6 cents per share, implying a gross dividend yield of 7.2 percent to 8.2 percent, for the 2014 financial year, and between 10.5 cents to 10.7 cents per share, for a gross yield of 8 percent to 9.1 percent, the following year.
Scales also owns and operates air freight service Balance Cargo, has North and South Island cold storage operations Polarcold and Whakatu Coldstores, a fruit juice concentrate business Pro Fruit, and a pet food unit Scales Meateor.
Deutsche Craig and First NZ Capital were lead managers of the offer.
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