01/02/2016 - 16:13

Report finds IPOs in good shape

01/02/2016 - 16:13


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PICKING UP: Skin Elements corporate adviser Luke Martino (left) and chief executive Peter Malone.

A strong end to the year in the national market for initial public offerings could be a harbinger for the year ahead, according to the annual IPO Watch Australia report.

The analysis, conducted by professional services firm HLB Mann Judd, found December was by far the biggest month for IPOs on the ASX in 2015, while the December quarter raised almost three times as much as the three months to March.

HLB Mann Judd partner (corporate and audit services) Marcus Ohm said that, nationwide, the 85 listings for 2015 were above the five-year average.

“While the 2014 year was dominated by a number of extremely large IPOs, the activity in 2015 was more evenly balanced,” he said.

“Only two entities with market capitalisations exceeding $1 billion floated in 2015 compared to seven in 2014.”

The balance across industries was affected by the slowdown in the mining and energy sectors, with a shift towards services.

“The technology, investments and healthcare industries were all solidly represented, contributing 44 out of a total of 85 new listings,” Mr Ohm said.

“Predictably, resources companies continued to perform poorly with only four listings in the energy and materials sectors.”

Just less than 70 per cent of companies made gains on the first day of trading, the report found, while about 38 per cent were lower by the end of the year.

That suggests a large portion of companies is undervalued on listing day.

The IPO pipeline moving into 2016 is expected to be healthy, with at least 20 companies planning to list as at the end of December.

That includes JC International Group, a Chinese company that will register in Perth and has two WA-based directors.

Another WA company planning to join the bourse was Skin Elements, which makes sunscreen and cosmetics.

The company, led by chief executive Peter Malone, is seeking to raise $4 million, and had previously attempted a reverse takeover through Minrex Resources before shareholders voted the plan down.

That number of proposed listings has remained unchanged throughout January, however, with substantial market volatility early in the month putting a dent in confidence.


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