Biometrics group Ideco made a positive debut on the JSE`s AltX this morning, with the share opening 13.6% higher than the private placement price.
Ideco`s private placement ahead of the listing raised R22.2 million, with 20.2 million shares placed with institutions and public investors at R1.10 per share.
With 13.3c annualised headline earnings per share (HEPS) for the period to 31 August next year, this put the Ideco share on a forward price:earnings ratio of 8.3 times.
The first trade, of 25 000 shares at R1.25 each, was recorded eight minutes after the market opened. The share traded later at R1.27 before retreating to R1.15 by midmorning. Nineteen trades had taken place by 10.05am, with 232 500 shares having changed hands.
The group is projecting HEPS of 28.1c in fiscal 2009.
"Our projections are supported by real engagements with our clients, and solid annuity flows," comments executive chairman Vhonani Mufamadi.
Mufamadi says he was not surprised by the opening. "The market has said to us that we should not expect a lot of liquidity. This is a share they want to buy and hold," he says.
Acquisition targets
Asked whether the private placement price of 110c a share was low, he says: "We think so too, but we wanted to give early takers a bit of upside going forward." As the group`s staff members are being allocated shares, they could also benefit, he adds.
Ideco said earlier his month that it planned to use a large part of the proceeds of the listing to make some acquisitions in complementary markets in which it did not already operate.
Mufamadi said at the time that the group had already identified what he described as "exciting" acquisition targets.
Ideco achieved revenue of R209.47 million for the year to 28 February and, according to the prelisting statement, is forecasting a figure of R293.68 million for the 18 months to 31 August next year and R300.12 million for the year to 31 August 2009.
The group forecasts attributable profit of R38.81 million and R56.85 million for the 18 months to end-August 2008 and 12 months to end-August 2009 respectively.
Ideco is the 69th company to list on AltX. Noah Greenhill, the JSE`s director of business development, says AltX now has a combined market capitalisation of R28 billion.
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