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: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Scoop Business: Productivity Commission To Look At Housing Land Supply

The Productivity Commission is to expand on its housing affordability report with an investigation into improving land supply and development capacity, particularly in areas with strong population growth. More>>

ALSO:

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news