Initial Public Offer

61% over the top

September 25, 2023 by IC Insider.com

One Great Studio Initial Public Offer of shares earlier this month was 61 percent oversubscribed in successfully raising just over $338 million. The stock commenced trading on Tuesday last week on the Jamaica Stock Exchange Junior Market and became the 49 listed Junior Market company but that won’t last that way for long as General Accident is expected to migrate to the Main Market on September 29.
The IPO attracted over 3,600 new subscribers and brings the total number of ordinary shares listed on the exchange to 101, pushing the number of securities listed to 149, a release from the Jamaica Stock Exchange stated.
The total capital raised by Junior Market companies totals $21.23 billion, with the above listing lifting the market capitalization of the Market from $187.34 billion as of September 18 to $189 billion.
“We are proud that you will be listing on a market that when benchmarked to pre-Covid activities is doing well,’ said Ms Andrea Kelly, General Manager of the Jamaica Central Securities Depository and JCSD Trustee Services, in her welcoming remarks at the Listing Ceremony. Ms Kelly stated that during the period 2017 to 2019, a total of 79,480 new accounts were created and 110,353, from 2020 to August 2023. “What this means is that we are steadily, despite the current market conditions, building a pool of investors from which companies can tap for equity and debt capital through the Main, Junior and Bond Markets”, stated Ms. Kelly.

Djuvane Browne, Managing Director

Addressing the audience at the Company’s listing ceremony, IGS, Djuvane Browne, Co-Founder and Chief Executive Officer, said, “This is an extremely humbling experience and I think the market has communicated clearly through this offer that they are still interested in investing in great companies. We’d like to thank everyone who participated in this offer “The listing of One Great Studio on the Jamaica Stock Exchange holds profound significance for both Jamaica and the wider region. It exemplifies the potential of young and aspiring entrepreneurs who, armed with their ideas and dedication, can transform those concepts into tangible plans and a client-centric focus.”
One Great Studio that was offered to the public at $1 ended trading on the first day of listing at $1.14 up 14 percent and went on during the week to trade as high as $1.36 on Thursday.

Filed Under: Initial Public Offers Tagged With: Initial Public Offer, IPO, Jamaica Stock Exchange, junior market, One Great Studio

One great Studio IPO allocations

September 5, 2023 by IC Insider.com

Allocation of ordinary shares in the public offer of 338,627,439 shares in One Great Studio Company Limited that was oversubscribed, has been determined.
According to Barita Investments, brokers for the issue, all applicants in the One Great Studio Team Members and Key Strategic Partners will get full the amounts applied for and General Public the first 20,000 shares applied for and approximately 34.09 percent of the balance.
Applications that were only accepted in part will be refunded the balance of their subscription monies as per the Prospectus, the release stated. The release states that they will now proceed to apply for a listing of its Ordinary Shares on the Junior Market of the Jamaica Stock Exchange, that will bring the total listings on the market to 49.
The level of oversubscription was not stated, but the level of allocation suggests that it was not one of the hot issues as a result, there is unlikely to be any sort term bounce of note, in the early days after the shares are listed.

Filed Under: Initial Public Offers, JSE Junior Market, Stock Market Tagged With: Barita Investments, Emerging markets, Emerging Stock, Initial Public Offer, IPO, Jamaica Stock Exchange, Jamaican stocks, junior market, One Great Studio

About 5.3% of Regency IPO shares for the Public

December 5, 2022 by IC Insider.com

Initial public share issues continue to disappoint many investors, with investors in the Regency Petroleum issue allocated the first 10,000 shares applied for plus approximately 5.3% thereafter, a release from the lead broker, GK Capital Management, stated.
Strategic Partners, Employees and applicants converting loans got a full allocation of amounts applied for, the report also indicated.
Applications in the general pool with the same JCSD number were consolidated and treated as one.
The prospectus indicates that listing of the shares is expected to take place within 21 days of the closing of the issue, with ten days elapsing since the issue closed on November 25, the listing should take place before the end of next week.
A total of 287,157,354 Ordinary Shares were for sale at $1 each, with only 115,196,354 shares that were available to the public.

Filed Under: Initial Public Offers Tagged With: GK Capital Management, Initial Public Offer, IPO, Jamaica Stock Exchange, junior market, Regency Petroleum

Public gets 2% of IPO share-allocation

August 20, 2022 by IC Insider.com

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The pull of initial public offers continues with some 15,000 applicants going after the One on One Educational Services public share issue of 380 million Ordinary Shares resulting in the general public getting, on average, just over 2.2 percent of shares applied for.
Based on the prospectus, the stock should be listed within one week of the closing date. Accordingly, the shares should be listed this coming week on the Junior Market of the Jamaica Stock Exchange and should be greeted by strong buying interest that seems set to push the price to the two dollar region. One on One will bring the companies listed on the Junior Market to 46 and will be the 50th company to list on the Junior Market since the commencement of that market in 2010, when Access Financial was listed as the first. It will be the 100 companies listed on the Jamaica Stock Exchange.
General Pool received the first 5,000 units plus a pro-rata allocation of approximately 2.23 percent of the excess.

Ricardo Allen CEO of One to One

Investors in the Convertible Loan Conversion and the Key Strategic Partners pools received a full allocation of the shares. Applicants in the Sagicor Pool received the first 450,000 units plus a pro-rata allocation of approximately 1.11 percent of the balance of the excess. Teachers and Trainers got the first 80,000 units plus a pro-rata share of around 3.47 percent of the excess applied for. Applicants in the Employees Pool receive the first 500,000 units plus a pro-rata allocation of approximately 69.83 percent of the rest.
A total of 108.75 million shares were allocated to the owners of Convertible Loans at 80 cents each, 60 million shares for the Key Strategic Partners, 30 million units each for the Sagicor reserve Pool, the Teachers and Trainers Pool and the Employees Reserve Share Pool and 121.25 million shares for the general public at $1 per share.

Filed Under: Initial Public Offers Tagged With: Emerging markets, Initial Public Offer, IPO, Jamaica Stock Exchange, junior market, OneonOne

Dolla list Wednesday

June 14, 2022 by IC Insider.com

The shares of Dolla Financial that was the subject of an Initial Public Offering will be listed on the Jamaica Stock Exchange Junior Market on Wednesday morning after increasing the number of shareholders to 14,981 as a result of the IPO.
The stock offered to the market at $1 each was heavily oversubscribed, with investors getting around four percent on average of the shares applied from the Public Pool. This publication expects moderate trading on the opening day with the price set to hit $1.30 but should see pretty spirited trading on Thursday when the price could well exceed the usual 30 percent one day limitation for price movement.
Around 40,000 applicants were received for the issue, of 500 million shares, information gleaned from persons close to the issue. The trading symbol will be Dolla, the same as the name.

Filed Under: Initial Public Offers, JSE Junior Market, Stock Market Tagged With: Daily Trading, Dolla Financial, Emerging markets, Emerging Stock, Initial Public Offer, IPO, Jamaica Stock Exchange, Jamaican stocks, junior market

JFP ipo requires careful thought

February 18, 2022 by IC Insider.com

Jamaican investors will get another shot of investing in a new initial public offer of shares when JFP Limited issue of 280 million ordinary shares opens on February 21 at a price of $1 each on the Jamaican market as the second such issue for the year to date.
The company, a custom manufacturer of furniture was formerly operated as Jamaica Fibreglass Products Limited, up to December last year. The Company manufactures furniture for offices, hotels, restaurants and laboratories, schools, point-of-sale items and boasts many large companies in Jamaica and internationally as customers. “Historically, the Company’s revenues have been derived from the hotel industry, government agencies and restaurants. Combined, these three (3) industries have been the source of an average of 72 percent of revenues for the past five (5) years with one third of the Company’s revenues being earned from the restaurant industry,” the prospectus states.
The share offer is set to close on February 28, with such a small amount is expected to close earlier. Half of the offering is being sold by one existing shareholder, with the balance of 140 million units is offered by the company, with the proceeds to boost working capital to enable it to mobilize efficiently and take advantage of more opportunities for revenue and profit growth.
The company is slated to list on the Junior Market of the Jamaica Stock Exchange shortly after the offer closes. A total of 111.6 million of the shares are Reserved Shares, not initially available to the wider public. The company currently has 980 million shares issued and after the issue closes will end at 1.12 billion units.
The prospectus states that the directors intend to pursue a liberal dividend policy that projects an annual dividend of between forty percent and eighty percent of net profits available for distribution, subject to the need for reinvestment in the Company from time to time.
Metry Seaga is the Chief Executive officer and Ian Levy is the chairman of the board that comprises seven members in total.
Historical operating performance has not been all perfect with sales declining between 2016 and 2018 from $285 million to $244 million with negligible profit and loss, but sales rose to $503 million in 2019 and slipped to $443 million in 2020, but profit before tax rose to $69 million from a small $2 million loss and climbed further in 2020 to $83 million. While profit to September 2020 amounted to $87 million from revenues of $312 million but profit dropped to a mere $4.8 million from sales of $210 million for the nine months to September last year.
Indications are that revenues could get back to the $400 million region, in 2022 and profit around $75 million for earnings per share of 7 cents. With the company producing to order there are likely to be swings in revenues and profit that could result in big swings in the price of the stock. Of course, results could be better or worse as past results show.
Gross profit for the 2020 financial year was $233 million and was flat compared to the year prior. Gross margins increased from 46.5 percent in 2019 to 52.5 percent. The prospectus stated that improved margins were due to a reduction in staff complement and streamlining its importation process as well as sourcing material locally where possible. Over the past five years, gross margin averaged 52 percent.
The Company’s revenues from contracted work for the nine (9) months to September last year was said to be delayed as a result of multiple unforeseen contract delays caused by the Covid-19 pandemic and the various COVID– 19 containment measures reduced the number of working hours which slowed the production and completion of work. The expected revenues from these delayed projects were $81 million.
The company reports a pipeline of $255 million in contracts for the nine months to September this year and includes a $153 million contract awarded to the Company to manufacture and outfit the check in counters and baggage scales at Sangster International Airport in Montego Bay, slated to be completed in the September quarter of 2022 and $32 million in revenues remaining to be recognized from a contract to furnish the ROK Hotel to be completed in the second quarter.
Investment in the stock carries added risk, but it is well noted that the last two Junior Market listings are trading well over the market average of 17.5, based on 2021 earnings and 10 times 2022 projected earnings, with Future Energy Source trading at an incredible PE of 40 times last year earnings and 29 times 2022/23 earnings, with Spur Tree Spices at 28 times last year’s earnings and 16 times that of 2022, both having strong medium term growth prospects.
There are distinct differences between the two previous listings and the latter. The former two have a very clear path that suggests fairly consistent growth, the same is not so for JFP as such the latter should trade at a discount to the former in a rational market.

Filed Under: Initial Public Offers Tagged With: Emerging markets, Initial Public Offer, IPO, Jamaica Fibreglass Products, Jamaica Stock Exchange, Jamaican stocks, JFP Limited, junior market

12% allotment for Spur Tree shares

January 7, 2022 by IC Insider.com

The staff at Spur Tree Spices lost a golden opportunity to make money from the company they worked for leaving a portion of the 10 million shares on the table for others to take up at a very low price that will likely double in rice sooner than later.
GK Capital Management released to the public the basis of allotment of the successful Spur Tree Spices Initial Public Offer of 335.4 million shares on Thursday.
Applicants in the staff key partner reserve pools will receive 100 percent of their application with the balance of the shares in these pools that were not applied for will become available for the General Public Pool Applicants, who will receive up to the first 10,000 shares plus a pro-rata allocation of approximately 11.76 percent of the excess shares for which they applied.
The prospectus indicated that allocation and refunds will take place within ten days of closing and trading in the shares no more than five business days after the Jamaica Stock Exchange approves the admission of shares to the Junior Market.
“It is the intention of the Company to apply to the JSE for admission of the Ordinary Shares to the Junior Market and to make such application immediately following the closing of the Invitation,” the prospectus stated.

Filed Under: Breaking News, Initial Public Offers Tagged With: Emerging markets, GK Capital Management, Initial Public Offer, IPO, Jamaica Stock Exchange, Jamaican stocks, junior market, Spur Tree Spices Jamaica

Sygnus Real Estate Finance comes up short

September 18, 2021 by IC Insider.com

Property in Mamee Bay, St Ann that Sygnus has an interest in.

The Initial Public Offering Sygnus Real Estate Finance that closed on September 10 came up short of the initial target, with just 1,153 applicants applying for the 207,608,341 shares offered by the company to raise $3.9 billion at $19.30 per share.
While the uptake was well below the minimum target it nevertheless, the offer still raised a respectable sum amounting to approximately $2.3 billion. The new capital adds to the $3.6 billion in shareholders’ equity at the end of February this year moving it to just under $6 billion and total assets of $8 billion.
The company is a real estate investment company with the primary objective of bringing flexible financing to monetise and unlock value in real estate assets across the Caribbean region. The type of instruments used to invest in real estate assets include preference shares, bridge financing, profit sharing debt, secured debt, mezzanine debt, and various forms of equity investments.

Filed Under: Initial Public Offers Tagged With: Initial Public Offer, IPO, Sygnus Real Estate Finance

Alliance IPO is now

December 21, 2020 by IC Insider.com

Shareholders of Alliance Financial Services will offer later this month just over 1.25 billion shares to the public for purchase at $1.59 each, for a total consideration of $1.99 billion.
The Invitation opens at 9 am on December 28 and will close at 4 pm January 11, subject to the Selling Shareholders’ right to close the issue at any time after it on the Opening Date once the shares are fully subscribed.
During its sixteen (16) years of operation, the company has grown to become a notable Cambio and remittance service provider in Jamaica.
The company reported a $709 million profit for the year to September 2020, from revenues of $1.5 billion. The 2020 profit equates to earnings per share of 11.3 cents for a PE of 14 but using the 2019 earnings the PE would have been 12.7, with both below the Jamaica Stock Exchange Main Market average of 17.
JMMB Securities are brokers for the offer.

Filed Under: Feature Stories, Initial Public Offers Tagged With: Alliance Financial Services, Emerging markets, Initial Public Offer, IPO, Jamaica Stock Exchange, JMMB Securities

Virtues & pitfalls of OPAs & stock splits

October 12, 2020 by IC Insider.com

A reader of IC Insider.com asks the following question. In general, based on what l have read, listed companies can raise capital faster than getting a loan. I think there is a risk for the company that the Additional Public Offer (APO) can be undersubscribed. What are other ways APOs may hurt the company?
An APO is just like an IPO but it is usually better as the former is already listed and has followers and a wide number of shareholders who are familiar with the company’s history of management and financial wellbeing.
Shares issued to the public can be undersubscribed if the pricing is out of line with investors’ expectations or if market conditions change adversely after the issue opens. Bear in mind that the management and their Broker would get a sense from the market whether the issue will be taken up or not. Brokers will usually do roadshows to pitch an issue or get feedback from their clients before pricing and going to market with the issue. At least with an APO, the market has already determined the value investors place on the company so pricing is easier than for an IPO that has to be priced off the indicative market valuation.
One more question? if there’s a stock split after an APO ( thinking of PanJam), might it be better to buy shares after the APO as they could buy more shares for less money, is my understanding correct?
Stock splits tend to cause the stock price to rise because the news of the split and the lower share price stimulate short-term interest and if investors wait until after the split they are likely to pay more for the stock in real terms. In the case of PanJam buying in the APO could be the best bet. It, however, depends on the timing of the split as well as that of the APO. The odds are that the split would take place before the APO and if history is anything to go by the stock price will rise and result in a higher APO price than the price before the split. Buying the stock now before the announced stock split may be the better move.