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

 

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

NASA, NOAA: Find 2014 Warmest Year In Modern Record

Since 1880, Earth’s average surface temperature has warmed by about 1.4 degrees Fahrenheit (0.8 degrees Celsius), a trend that is largely driven by the increase in carbon dioxide and other human emissions into the planet’s atmosphere. The majority of that warming has occurred in the past three decades. More>>

ALSO:

Scoop Business: New Zealand’s Reserve Bank Named Central Bank Of The Year

The Reserve Bank of New Zealand’s efforts to stifle house price inflation by using new policy tools has seen the institution named Central Bank of the year by Central Banking Publications, a publisher specialising in global central banking practice. More>>

ALSO:

Science Media Centre: Viral Science And Another 'Big Dry'?

"Potentially, if there is no significant rainfall for the next month or so, we could be heading into one of the worst nation-wide droughts we’ve seen for some time," warns NIWA principal climate scientist Dr Andrew Tait. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news