Regency IPO opens on Thursday for a $1

Regency Petroleum Co. Limited a company based in Westmoreland is offering up to 287,157,354 Ordinary Shares for sale at $1 each. The offer opens on Thursday, November 24 and should bring the total Junior Market listings to 48 and the number of companies to 47. Only 115,196,354 shares will be available to the public.
The company reported revenues of $332 million in the half year results to June this year, up from $248 million in 2021, with profit after tax of $51 million compared with $35 million in 2021, putting the earnings per share for this year at 98 cents, with the PE at 10 times this year’s pretax earnings versus the Junior Market average of just over 12, but below the peak of recent new issues of approximately 20. ICInsider.com expects the offer to close quickly after opening and the price to soar into the $2 range after listing.
Revenues for the 2021 fiscal year were $607 million a big jump from $194 million in 2020 and just $45 million in 2019, with a profit of $59 million in 2021, after taxation of $18 million, up from $14 million with taxation of $3 million in 2020.
The company’s operations span Jamaica as a petroleum marketing company licensed to distribute bulk petroleum products. The company was founded by Andrew Williams, Chief Executive Officer. Revenues are currently generated from sales of LPG Cooking Gas, Automotive Petroleum and Transportation of gasoline.
Revenues are set to climb in 2023 with the ongoing construction of two service stations which should be open to the public by the end of the March quarter of next year, the company stated in its prospectus. A service station to be opened in Negril, which Regency will lease, is located upon entering the town from the east, will increase the visibility of the brand and generate additional revenues and profit. In addition, the company is likely to see increased business due to the exposure from the IPO and trading in the shares after listing on the exchange.
The company states that it has purchased delivery vehicles to reduce costs and improve efficiency and create greater economic value in the future. Currently, only 90 Octane Fuel and Diesel are sold at the service station, the opening of the new service stations will see the introduction of ULSD and 87 Octane Fuel at the pumps. The new products should attract added demand and provide a more inclusive retail market product line.
Expansion plans call for the purchase of additional cylinders to supply increased demand for its cooking gas to reduce cost of sales and improve efficiency, the Company will also acquire a fuel tank trailer, the prospectus states.
Of the total issue 171,961,000 shares are reserved as follows – 55.5 million for Employees & Key Strategic Partners, 100 million for GK Investments to convert loan balance and 16.46 million for Associates Loan Conversion.
The company is relatively small, with Shareholders’ Equity of $111 million at the end of June this year, accordingly, there is much room for growth going forward.
The directors of the company are Dr André Foote, Andrew Williams, Andrew Cocking, Radcliff Knibbs and Edgar Bennett.

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