While it has been a rosy year for those uranium and iron ore explorers that dominated the top spots for floats in 2006, the same could not be said for some of our smaller, non-resource IPOs, which ended the year at the other end of the spectrum.
While it has been a rosy year for those uranium and iron ore explorers that dominated the top spots for floats in 2006, the same could not be said for some of our smaller, non-resource IPOs, which ended the year at the other end of the spectrum.
While it has been a rosy year for those uranium and iron ore explorers that dominated the top spots for floats in 2006, the same could not be said for some of our smaller, non-resource IPOs, which ended the year at the other end of the spectrum.
Subiaco-based financial services company Capital Intelligence Ltd, formerly Hometrader Ltd, fared the worst, slumping 60 per cent on its issue price of 20 cents after raising $3 million in its IPO.
The company, which listed at the end of January and produces products for home share traders, including the Hometrader and Trading Made Simple brands, posted a loss of $2.7 million on revenues of $6.9 million for 2005-06.
However, having now developed the brands, the company believes it is in a position to reduce expenditure, and is now focused on becoming cash flow neutral on a month-by-month basis by the end of March 2007.
It was also a tough year for Western Australian-based biofuel companies. Both Sterling Biofuels Ltd and Natural Fuel Ltd performed poorly on the back of reduced investor sentiment in the sector following a fall in oil prices and the passing of fuel tax laws, which have had a detrimental effect on biodiesel’s competitiveness in the market.
Sterling, which has constructed processing plants in Malaysia to produce biofuels, closed almost 50 per cent below its $1 issue price, while Natural fell 23 per cent below its $1.50 issue price after raising $83 million it its IPO.
However, Mission Biofuels Ltd bucked the trend and managed to post a 14 per cent premium to its $1.00 issue price.
The company is currently establishing a 100,000 tonnes per annum biodiesel refinery in Malaysia with the possibility of producing biodiesel by July this year.
Another non-resource company to fare poorly in 2006 was energy minnow Eneabba Gas Ltd, which has experienced a 28 per cent slump in its share price from its 25-cent issue price.
The company recently advised that its subsidiary Eneabba Energy Pty Ltd had been granted works approval for construction of its power station near Dongara. This follows the company receiving Environmental Protection Authority approval for the station.
Micro brewing company Oz Brewing and olive grower and olive oil marketer Frankland River Olive Company Ltd have also experienced slumps in their share prices, falling 25 per cent and 20 per cent respectively below their issue prices of 15 cents and 25 cents.
Oz, which trades under its ‘Mad Monk’ brand, raised $1.5 million to establish a cafe and microbrewery at the old Miss Maud site on Fremantle's cappuccino strip.