Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


UPDATE: Scales shares edge lower on NZX debut

UPDATE: Scales shares edge lower on NZX debut raising $30M of new capital to repay debt

(Updates with price movements, company and investor comments)

By Suze Metherell

July 25 (BusinessDesk) - Shares in Scales Corp slipped 0.6 percent in early trading on their NZX debut as the fruit and vegetables logistics company's raised $30 million of new capital to reduce debt.

The shares recently traded at $1.59, having first traded at $1.61, largely flat compared to the $1.60 IPO price. Some 2 million shares of the company's 139.8 million shares on issue changed hands. Private equity firm Direct Capital sold into the $148 million 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 company's $222 million market value makes it the 60th biggest New Zealand stock on the bourse.

"First point of call will be to reduce debt with it," managing director Andy Borland told BusinessDesk, referring to how the new capital raised will be used, and said he expects average prospective net debt to be $44.1 million.

Scales is New Zealand's largest apple exporter, and also owns businesses across the primary sector including, sea and air freight services, cold store operations, and food ingredients, including pet foods and juice concentrate businesses. Last year the company lifted profit 50 percent to $20.4 million in calendar 2013, on the back of rising Asian demand for apples.

"We are lifting our apple production with more apples targeted for Asia, and we're going to support that with a bit more investment in the overseas' market," Borland said. To support more apples the company is expanding its cold store network to Auckland, and were "very close" to finalising those plans, he said.

The IPO is the latest in a series of floats, which have primarily been tech-based companies seeking growth. Scales's debut comes two days after portable measuring device maker ikeGPS Group shares slumped as much as 18 percent on debut from its $1.10 offer price, and recently traded at 99 cents. Other recent listing, Serko, which makes travel booking software, has also failed to stay above its $1.10 offer price, recently trading at 90 cents.

"It's quite good to have more representation of New Zealand's forte coming onto the market," said Greg Fraser, senior equity analyst at Mint Asset Management, which bought into the offer. "Tech stocks are nice to have but those primary stocks certainly are our bread and butter, if you'll pardon the pun. Its more representative of New Zealand Inc."

Scales forecast net profit to fall to $15.9 million in 2014, before a rise to $20.8 million in 2015, and expects to pay a dividend of between 9.4 cents per share and 9.6 cents per share, and between 10.5 cents to 10.7 cents per share, the following year.

Deutsche Craig and First NZ Capital were lead managers of the offer.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Women's Affairs: Government Accepts Recommendations On Pay Equity

The Government will update the Equal Pay Act and amend the Employment Relations Act to implement recommendations of the Joint Working Group on Pay Equity. More>>

ALSO:

Immigration: Increase In Seasonal Workers For RSE

The current cap will be increased by 1,000 from 9,500 to 10,500 RSE workers for the 2016-17 season. Mr Woodhouse says the horticulture and viticulture industry is New Zealand’s fourth largest export industry, producing almost $5 billion in exports. More>>

ALSO:

Hurunui: Crown Irrigation Invests Up To $3.4m In North Canterbury

Crown Irrigation Investments will invest up to $3.4m in the Hurunui Water Project, an irrigation scheme that will be capable of irrigating up to 21,000 hectares on the south side of the Hurunui River in North Canterbury. More>>

ALSO:

Not So Great:Butterfly Eradication Success

The invasive pest great white butterfly has been eradicated from New Zealand in a world-first achievement, Primary Industries Minister Nathan Guy and Conservation Minister Maggie Barry say. More>>

Gordon Campbell: On The Government’s Tax Cuts Fixation

Long before the earthquake hit, the dodginess of the government tax cuts programnme was evident in the language of its packaging. It is being touted as a “tax cuts and family care” package... More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news