Tag: ISA Group

Value of funds raised set to jump from $1.3b to $7.8b

19 December 2013:  After five years in the doldrums, the initial public offering (IPO) market has bounced back in the second half of 2013, with the value of funds raised in the calendar year to soar from $1.3 billion to $7.8 billion.

The latest Deloitte Corporate Finance IPO review finds that, by the end of calendar year 2013, an expected 61 IPOs will be finalised, up from 48 in 2012.

This will make 2013 the biggest year for float activity since the GFC (2007) in terms of funds raised, when 260 IPOs delivered a combined capital raising of more than $10 billion.

Deloitte Corporate Finance Partner and IPO specialist Ian Turner said: “The year has been one of two halves, with the steady growth in the ASX, growing confidence and strong demand from institutional investors, combined with the success of some of the earlier floats such as Virtus, paving the way for a rush of new listings in the second half.

“Approximately 90 per cent of total funds raised in the year are expected to be raised in the second half of 2013, with December alone expected to produce 23 IPOs with a combined capital raising of $4.6 billion.”

Annual funds raised by IPO 2000-2013

A growing trend in 2013 has been the supply of floats from private equity, with about 25 per cent or $2.1 billion of total funds raised being from private equity exits.

Largest IPOs by private equity funds

Deloitte Corporate Finance Partner Steve Woosnam said: “Contrary to at times negative sentiment around pricing of private equity exits, the year-to-date price performance from private equity-owned companies has shown some very positive returns, most notably, Virtus Health, Veda Group and Ozforex who have all achieved 30-plus per cent price gains.”

“While some recent floats are currently in negative territory, we still expect the IPO window to remain open into the New Year, fuelled by a backlog of companies whose listing options in previous years have been limited and given strong and ongoing institutional and retail investor demand.

“The hot sectors in 2013 were financial services, property and healthcare, and they will continue to provide plenty of floats in 2014. We also expect to see plenty of continued supply from private equity.”

The percentage of IPOs trading at or above their issue price was steady with the previous year at 53 per cent, but much improved from a low of 29 per cent in 2011. In addition, the total weighted average price gain of all floats was an encouraging five per cent.

Summary of IPO share price performances

*53 of expected 61 IPOs listed at preliminary review date of 17 December 2013

Indoor Skydive Australia was the best performing IPO of the year, with the Sydney-based company’s 20 cent shares improving by 175% to 55 cents at the review date of 17 December 2013.

The next-best performers were Freelancer (up 156 per cent), Brisbane-based phosphate explorer Fertoz (up 130%) and legal firm Shine Corporate (up 78 per cent).

Mr Turner said the ten largest and the ten best performing IPOs of the year spanned a wide range of industry sectors, reflecting the broad-based nature of the rebound in the IPO market.

“In particular, significant interest has been generated in real estate, financial sevices and healthcare, however the withdrawel of some  potential IPO candidates this year also highlights that there is not universal support across all sectors,” he said.

Top 10 IPOs by share price performance

The largest IPO for the year was New Zealand-based Meridian Energy, which listed on the NZX and the ASX after an initial public offer to investors on both sides of the Tasman totalling A$1,129 million. The total amount raised will increase to A$1,694 million when a second instalment falls due in February 2015.

Four of the five largest IPOs of the year are scheduled to occur in December with Cover-More Group ($521.0 million) expected to list this week, following the recent listing of  Pact Group ($648.8 million), GDI Property Group ($567.7 million) and Nine Entertainment Co. ($643.3 million) which listed earlier this month.

Top 10 IPOs by size

Mr Woosnam said the industry profile of IPO activity had changed markedly in 2013.

“Resource IPOs out of Perth have dominated the market in terms of number of floats since the GFC,” he said.

“This trend continued into 2012, when almost 80 per cent of all floats were in the mining or energy sectors.

“In 2013, resource floats dropped to only one-third of all IPO activity, and we have seen the re-emergence of industries such as real estate, financial services, healthcare and consumer services.”

IPOs by industry sector

Analysis of float activity by business type (rather than GICS industry classification) highlights the importance of the financial services, real estate and healthcare sectors in the rebound in the IPO market in 2013.

Financial services IPOs > $10m

Financial services related IPOs accounted for $2 billion, or 25 per cent, of all funds raised. The sector produced a number of strong share price performances, resulting in a weighted average price gain of 27 per cent as of the review date.

Real estate IPOs > $10m

 

Real estate IPOs were also a large source of float activity, accounting for $1.6 billion or 20 per cent of all funds raised, although average price performance was in negative territory at a weighted average share price loss of seven per cent as of the review date, with one more IPO in the sector to follow in the last week before Christmas.

Healthcare/Pharmaceutical IPOs

 

Healthcare-related IPOs were also an emerging trend in the 2013 market, with a total of $462 million raised by five floats. The weighted average share price gain was 38 per cent, thanks largely to the 50 per cent gain by Virtus Health, one of the 10 largest IPOs of the year.

IPO activity by state

NSW was the most active state for IPOs in terms of float numbers and value of capital raised. The state produced almost half of all IPOs for the year (29 out of 61), and accounted for more than half of the total amount raised. Significant IPOs that have listed to date from NSW include Nine Entertainment Co. ($643m), GDI Property Group ($568m), Cover-More Group ($521m), Virtus Health ($347m), Veda Group ($341m), Ozforex Group ($439m) and Dick Smith Holdings ($345m).

Victoria ranked second among the states, due to large IPOs such as Pact Group ($648.8 million), Hotel Property Investments ($279 million) and Vocation ($253 million).

Read the original Deloitte media release here

Written by Tony Featherstone 

The trickle of larger IPOs has turned into a flood. Barely a day passes without another float being launched and larger offers that had been shelved being repackaged for sale. Although each float should be assessed on its merits, the sheer volume of IPOs is cause for alarm.

I prefer investing in floats at the start of the IPO cycle, when better-quality companies are offered at fairer valuations, rather than in bull market conditions when advisers will float anything to earn a fee. But this latest IPO cycle has become incredibly compressed as sellers rush for the exits.

That does not mean investors should avoid all floats. There have been several terrific performers this year: Virtus Health, Steadfast Group, Shine Corporate and OzForex Group and a handful of other floats are well up on their issue price in a rising sharemarket over 2013.

Nevertheless, the float mania gripping Australian and global sharemarkets means investors need to be extra-careful when investing in IPOs. Jeremy Grantham, the legendary investor and chief investment strategist at US-based asset consultant GMO, this week cautioned investors about the IPO boom.

In his firm’s quarterly letter to investors, Grantham wrote: “We have also had a sharp and unexpected uptick in parts of the IPO market in the US, so I would think we are probably in the slow build-up to something interesting – a badly overpriced market and bubble conditions.”

Grantham added: “My personal guess is that the US market, especially the non-blue chips, will work its way higher, perhaps by 20 per cent to 30 per cent in the next year or, more likely, two years, with the rest of the world, including emerging-market equities, covering even more ground in at least a partial catch-up. And then we will have the third in the series of serious market busts since 1999.”

If Grantham is right, Australian investors could be buying IPOs this year and next near peak valuations, and taking a gamble. Again, some IPOs will be well worth that risk, but many more could be overpriced dogs cashing in on the latest bout of float hype.

One worthwhile strategy is focusing on recently listed micro-cap stocks that have a low market profile. It always amazes me how the market so quickly gives up on small IPOs if they have a poor debut or trade below their issue price within months of listing – even though some are much better value.

Or how the market sometimes takes so long to pick up on better-performing recently listed companies. Indoor Skydive Australia Group and Osprey Medical – two micro-caps I covered for The Bull earlier this year, are good examples. Both have rallied since listing, but still have a low investment profile.

Indoor Skydive sought $12 million last year through an IPO to build Australia’s first simulated skydiving attraction at Penrith, western Sydney. Its 20-cent issued shares have rallied to 59 cents, (they were 35 cents when The Bull wrote about Indoor Skydive in February).

I wrote at the time: “Indoor Skydive is obviously speculative. But unlike many micro-caps, it at least has a product that has had strong success overseas, has a well-regarded board, and is potentially within 12 to 18 months of first revenue.”

The response to an early-bird sale for its attraction, expected to open next year, shows the potential. Five hundred hours of wind-tunnel usage, worth $400,000, was sold out within four days. Anybody who has followed the strong success of iFly Singapore understands the popularity of indoor skydiving attractions – and why Indoor Skydive could build strong early cashflow.  Indoor extreme park venues are booming overseas.

Indoor Skydive has so far done a good job managing project construction and expects the facility to open late in the first quarter of 2014 – in line with market expectations. But it notes the facility is entering a “critical” and “challenging” phase as tunnel components are assembled and installed.

Indoor Skydive plans to minimise construction risks, and confirmation in the coming months that the facility will open in time for the Easter school holidays could lift the stock. Indoor Skydive’s $49-million valuation has potential to lift next year, provided it manages construction risk and early demand meets the huge expectations for this type of product. The early signs are good, but Indoor Skydive clearly suits experienced investors comfortable with higher-risk, less liquid, micro-caps.

The other IPO mentioned in February, Osprey Medical, has rallied from 40 cents to 73 cents since its May 2012 listing (they were 60 cents when this column last wrote about the stock). Osprey’s flagship device treats contrast-induced nephropathy (CIN), a form of kidney injury caused by X-ray-visible dye that cardiologists inject during heart procedures such as angioplasty and stenting. The company’s Cincor System captures a large amount of dye before it circulates to the kidneys.

Interest is rapidly building in the local life-sciences sector, in part because the US Nasdaq Biotechnology Index has soared more than 60 per cent this year to a record high, and 41 biotech floats have been unleashed in the US alone in 2013, collectively raising just under US$3 billion.

Osprey is among the more promising small-cap technology companies, but like all emerging life-science stocks, should be considered speculative.

Tony Featherstone is a former managing editor of BRW and Shares magazines. View the original article here.

Written by Edmund Tadros and Sally Rose

Feted job outsourcing site Freelancer and a little-known company building an indoor skydiving centre in Sydney’s west have provided the most breathtaking returns of this year’s floats.

Freelancer shares are up 268 per cent since listing on Friday, while shares in Indoor Skydive Australia Group have almost tripled since listing in January. They are the top two ­performers of the more than 30 companies floated on the stock exchange to date this year.

Other top performers include phosphate firm Fertoz, up 150 per cent, and law firm Shine Corporate, up 71.8 per cent. Virtus Health is up 56.7 per cent since listing in June.

Analysis by The Australian Financial Review shows shares in 13 of the 32 floats in 2013 are trading above their debut price, 17 are trading under water, while two have not moved.

The worst performers are dominated by junior resource companies. Uranium explorer ZEUS Resources has lost 89 per cent since listing. Hunter Valley coal seam gas developer Malabar Coal is down 77 per cent, and West Australian base metal and gold explorer Classic Minerals is down 72.5 per cent.

Of the five floats raising more than $100 million, online insurance ­comparison website iSelect has performed the worst, with its shares down 35.1 per cent.

The overall mixed performance comes before a December that will feature more than a dozen confirmed floats, including a $341.1 million raising from credit agency Veda Group and the biggest float of the year, a $700 million raising by television network Nine Entertainment Co.

The next biggest float of the year was Ozforex Group, which raised $439 million when it listed in October.

One investor is sceptical about the speed with which Nine Entertainment is returning to the market. “It is hard to believe that Channel Nine is a much better business than it was a year ago, but because the stock market is up, it could float for more than it should,” Platypus Asset Management chief investment officer Donald Williams said.

Generally speaking, Mr Williams said floats of businesses which have been run profitably in private hands for many years and government privatisations are more attractive than private equity exits when most of the cost savings and efficiency gains have already been made. He said it was encouraging when private equity owners planned to retain an interest in businesses they were listing, even if this did not eventuate due to an offer being oversubscribed.

“Quadrant Private Equity planned to keep a stake in fertility clinic network Virtus Health but demand for the stock at issue was overwhelming so they sold out completely,” he said.

Nine Entertainment Co’s two major shareholders, Oaktree Capital and Apollo Global Management, will retain significant holdings in the media company after it is listed.

Overall, Mr Williams said that while the quality of the IPO pipeline is mixed, “it appears there is more good than bad coming to market”.

“Valuations on a price-earnings ratios seem more solid than they have for the past four years,” he said.

THRILLS, NOT SPILLS, FOR INDOOR SKYDIVING INVESTORS

Indoor Skydive Australia Group raised $12 million in a January listing at 20¢ a share. The group’s managing director, Wayne Jones, a former member of the Australian military’s Special Air Services regiment, has an exclusive licensing agreement with United States company SkyVenture to use their technology to build indoor tunnels for simulated skydiving. The stock peaked at more than 75¢ in September before steadying around 55¢.

“Internationally, once built, these centres generate very positive cash flow,” said Greencape Capital portfolio manager Matthew Ryland, who has invested in Indoor Skydive.

“I went to facilities in Texas and Singapore to speak to management and try an indoor skydive,” Mr Ryland said. “Australia is a big market for recreational skydivers so we expect the centre at Penrith to be popular and see the opportunity to add at least another two or three locations around Australia.”

The main market will be providing a more affordable practice venue to recreational skydivers. Other markets include family and corporate outings.

Mr Ryland is hopeful Indoor Skydive Australia will secure a contract with the Australian military to use the facilities outside of regular business hours as a training venue.

View the published article:

Veritas Securities have put together a comprehensive report on ISA Group,  highlighting the completed capital raising, construction at Penrith, expansion of management team and JTDA with SkyVenture.

Read the full report here.

Written by Proactive Investors. 

Indoor Skydive Australia Group (ASX:IDZ) is delivering in its quest to bring indoor skydiving facilities down under, with thrill-seekers snapping up $400,000 worth of advance sky diving time sold in 4 hours.

The total allotment of 500 hours vertical wind tunnel time at its Penrith Facility in New South Wales was sold out in 4 days.

ISA Group’s customer facing brand, iFLY Downunder, entered the market with an early bird offer to experienced skydivers and tunnel flyers.

Initially launched at the West Coast Sundowner, an international skydiving event in Perth, the offer was marketed to experienced flyers entitling them to purchase tunnel time following the opening of the Penrith facility in 2014.

Lessons learnt from this activity are being incorporated into final sales systems and processes.

The early bird offers provided an opportunity to test the market and processing systems, and the public demand was  strong, validating Indoor’s business plan.

Indoor recently completed a capital raising and placement for $10.4 million to fund expansion and strengthen its management team, with a focus to constructing additional vertical wind tunnels.

Construction of the Penrith facility is entering the final stages of equipment installation, fit-out, commissioning and obtaining applicable operating licences.

Since the last construction update the basement walls have been completed, waterproof membrane applied, structural steel beams for the first level installed and footings work for the ground floor slab are nearing completion.

Indoor currently expects practical completion of the works at the Penrith facility towards the later part of the 1st quarter 2014, allowing capitalisation on the Easter School holidays and the demand for “all weather entertainment” during the cooler months.

Read the original article here

Written by Proactive Investors

Indoor Skydive Australia (ASX: IDZ) is preparing an update on the institutional component of a proposed capital raising and has been granted an ASX trading halt.

The raising comprises an accelerated, renounceable pro-rata entitlement offer of shares.

The halt will be in place until the open of trade on Monday 23rd September 2013, unless announced earlier.

Indoor Skydive is currently constructing Australia’s only large scale commercial indoor skydiving facility at Penrith, New South Wales, with completion expected in the first quarter of 2014.

This will house one of the largest Vertical Wind Tunnels (VWT) available in the world that can accommodate up to eight professional skydivers, or two amateurs, at a time for training or entertainment.

It had in August reached an alliance agreement with the Australian Parachute Federation Incorporated to support the development of the sport of skydiving within Australia.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.  Read the original article on the Proactive Investors website.

“…watch Indoor Skydive Australia Group… has done well since listing early this year”

Will Featherstone from BRW gives an insight into his thoughts about ISA Group as an investment opportunity via his article “Will Travel: Pick of the Tourism stocks”.

 

Here is a snapshot:

“Speculators should watch Indoor Skydive Australia Group. It is building a simulated skydiving attraction at Penrith in New South Wales, expected to open in first quarter 2014.

Indoor Skydive has done well since listing early this year through a float, it’s 20c issued shares rising to 49c in a wretched market for small listings. Indoor’s biggest sales point is the success of similar indoor skydiving attractions in Singapore and elsewhere. As a thinly traded micro-cap in the construction phase, Indoor Skydive is a higher-risk stock.

But it’s easy to imagine hordes of thrill-seekers and skydivers using its vertical wind tunnel if the international experience is replicated here, construction goes smoothly and the attraction opens on time.

Early signs say it will.”

Read the full Will Featherstone article here.

Article by Bevis Yeo

Indoor Skydive Australia Group (ASX:IDZ) has leapt into the ASX after raising almost $7.4 million from its IPO.

The company plans to construct and operate the only large scale commercial indoor skydiving facility in Australia, which will also be the second of its type in the Asia Pacific region.

Indoor Skydive will begin trading at 11am (AEDT) on Friday 18 January.

The planned facility – to be sited within the Penrith Rugby League Club redevelopment at Penrith – will house one of the largest Verical Wind Tunnels (VWT) available in the world and will be able to accommodate up to eight professional skydivers, or two amateurs, at a time for training or entertainment.

Professional sky divers are required ongoing training to remain competitive as do military operators.

As such, VWT infrastructure is complementary to skydiving as it provides virtual or simulated training in a controlled environment that is not subject to weather and other factors.

International organisations have also recommended the use of VWT for simulating training to prepare beginners for full licencing to undertake individual skydiving.

This facility is expecting to start operating no later than January 2014.

Indoor Skydive believes there is potential for it to operate a portfolio of VWTS located throughout Australia, meeting the demand of users located in capital cities and suburbs.

View Article

Article by Sophie Foster

Despite a lacklustre response from the market, Queensland rich-lister Stephen Baxter was happy yesterday with the first day’s trade in an indoor skydiving initiative backed by his family trust. Indoor Skydive Australia Group (listed on the Australian stock market under IDZ) opened its first day’s trade at 21.5¢, but closed down 1.5¢ at its 20¢ issue price.

Mr Baxter, who family trust Birkdale Holdings held 27 per cent of shares in the lead-up to listing, said “it was a great day”. “It was a great result for shareholders and the persistence of Wayne (Jones) and Danny (Hogan) has really paid off,” he said.

Mr Jones who is ISA Group chief executive, is a 21-year defence force veteran, serving 14 years with the Special Air Service, while Mr Hogan, chief operating officer, had 15 years with the Special Air Service Regiment.

Mr Baxter, a non-executive director of ISA Group, said preparatory work on the Penrith site was expected to begin in the last week of this month. The company’s first indoor skydiving tunnel sits on a plot next to the Penrith Panthers Rugby League Club. “It will all kick off the day after Australian Day.” Mr Baxter said. “We are planning a breaking of the ground ceremony in mid to late February. We’ve activated the contract with the American supplier for the manufacture of their equipment in the US.”