Hafary Holdings, a local supplier of tiles with almost 30 years of history, has launched its initial public offering of 32.5 million new shares at 20 cents each, in line with its proposed listing on the Catalist today.

The IPO of 32.5 million new shares represents 20% of Hafary’s enlarged share capital of 162.5 million shares. At 20 cents per share, the placement is priced at a historical price earnings ratio of 7.4 times, based on the group’s net earnings per share of 2.7 cents for FY2009 (year ended 30 June 2009) and pre-placement share capital of 130 million shares.

Collins Stewart is the sponsor and placement agent for Hafary’s listing on the Catalist. Listing and trading of the group’s shares is expected to start at on Dec 7.

Hafary says it intends to use the net proceeds of $4.8 million to fund possible acquisitions, joint ventures and/or strategic alliances when opportunities arise, and for the general working capital purposes of the group.

In the past three financial years, Hafary’s revenue grew from $19.9 million in FY2007 to $30.8 million in FY2009, representing an annual compounded annual growth rate (CAGR) of 24.4%. Profit after tax grew by a CAGR of 8.3%, from $2.9 million in FY2007 to $3.4 million.
Hafary says repeat customers accounted for about 76.7% of revenue in FY2009.

Since its establishment in 1980, Hafary says it has grown into one of Singapore’s leading suppliers of tiles with a head office, two showrooms and three warehouses occupying an aggregate built-in area of approximately 139,199 sq ft.

Through the group’s robust sourcing and procurement network, Hafary is able to carry a broad variety of tiles from China and Europe; and through economies of scale, has the ability to sell these to customers at competitive prices.

Hafary says it is eyeing Vietnam as a strong potential market, “given the country’s strong economic growth and growing affluence.”