Harry's Holdings IPO

Another IPO that I'll give a miss: Harry's Holdings IPO. Stated that in 2009 its revenues were $37.3 million with a profit of $2 million. Profit margin of then less than 10%? No thanks!

Homegrown pubs and restaurants operator Harry's Holdings plans to raise S$5.28 million through an initial public offering (IPO) for a listing on Singapore Exchange's Catalist board.

Harry's is offering 24 million shares at 22 cents each, with all shares to be placed out to investors.

The company said the 24 million new shares represents about 25.3 per cent of the group's post-placement share capital of 95 million shares.

And at 22 cents a share, the shares offering is priced at a historical price earnings ratio of 7.8 times, based on the group's net earnings per share of 2.82 cents for the financial year ended Dec 31, 2009.

From a single bar opened in Boat Quay in 1992, Harry's currently owns and operates a chain of more than 30 lifestyle bars.

The company said it plans to use about S$1.5 million of the IPO proceeds to expand its brand presence in Singapore and overseas by opening new establishments by direct investments or joint ventures.

It also plans to use another S$250,000 to establish distribution channels for Harry's beer by appointing distributors and offering it for sale in select local supermarkets.

The remaining proceeds will be used for the group's working capital requirements.

Listing and trading of the company's shares is expected to start on January 26.

From Channel NewsAsia, "Harry's to launch IPO".

HOMEGROWN bar chain Harry's yesterday announced its listing on the SGX Catalist with an all-placement IPO.

It will offer 24 million new shares at 22 cents each, and trading is expected to commence on Jan 26.

The 24 million new shares represent approximately 25.3 per cent of the group's post-placement share capital of 95 million shares.

At 22 cents per share, the placement is priced at a historical price/earnings ratio of 7.8 times.

This is based on the group's net earnings per share of 2.82 cents for the financial year ended Dec 31, 2009, and pre-placement share capital of 71 million shares.

Collins Stewart is the sponsor and placement agent for the IPO.

Of the $5.28 million in IPO proceeds, $1.5 million will be used to expand its brand presence in Singapore and fund expansion to overseas markets, said Harry's.

Some $250,000 will be used to establish distribution channels for Harry's beer in local supermarkets.

The rest of the proceeds will fund working capital requirements.

Harry's chief executive Mohan Mulani said the Catalist listing was the 'right move to make' as the company already has a pool of public shareholders.

Harry's has been listed on Phillip Securities OTC (over-the-counter) market since 2007.

Starting from a single bar in 1992, Harry's has grown to a chain of 32 bars and has diversified into other F&B businesses such as its 'Mirchi' line of Indian restaurants, catering and a boutique hotel.

It also owns Gymboree Play Programs, which provides play and music programmes to children, but Mr Mulani said there are no plans to further diversify into non-F&B businesses.

The Harry's bar chain contributes over 80 per cent of the group's revenue and will continue to be the main revenue driver, he added.

Harry's intends to adopt a franchise model for the overseas expansion of its bar chain. Mr Mulani said the franchise model was chosen because it is the 'best model' given Harry's resources and size.

'Some SMEs try to stretch themselves too soon,' he said. 'This is painful on their resources and P&L if they get it wrong.'

Mr Mulani revealed that he is in talks with interested parties in China and Vietnam and hopes to have the 'first overseas Harry's outlet in 2012'.

When BT asked if the overseas foray had anything to do with over-saturation in the local F&B industry, Mr Mulani admitted he faced limits to growth in the small Singapore market but with over 30 bars, 'the growth in the business is more than the cannibalisation'.

Harry's raked in revenues of $37.3 million in 2009, with a profit of $2 million.

From Business Times, "Harry's to list on SGX Catalist".

0 comments:

Post a Comment

Blog Archive