Eurosports Global Limited

Eurosports Global Limited: Eurosports is seeking a listing on Catalist and has started book building today. The invitation will comprise of 1.5m shares for the public and 78.5m placement shares at $0.28 apiece, indicating a valuation of 3.8x P/B and 10.9x FY13 P/E. Market cap post-IPO will be $74.2m, comprising 265m shares. Book building will close at 12pm on 15 Jan, with an expected commencement of trading at 9am on 17 Jan. Eurosports is an automobile distributor of new and/or pre-owned luxury automobiles of brands which comprise mainly Lamborghini, Pagani and Alfa Romeo, as well as customised automobiles supplied by Touring Superleggera. The group also provides after-sales services, including sales of automobile parts and accessories, as well as an automobile leasing business. Eurosports is also a distributor of luxury watch brand deLaCour. Strategically, Eurosports intends to grow its distribution network locally and into other emerging markets in the region, which may include the acquisition of existing distributorships or dealerships in the relevant country. Eurosports intends to expand its business through synergistic JVs and strategic alliances. In addition, the group may seek diversification into other luxury lifestyle businesses. A special dividend is pending upon completion of a sale and leaseback arrangement on its Teban Gardens showrooms and service centres which is expected in 1Q14. Eurosports intends to declare a one-time special dividend of between $6-8m to shareholders, translating into 2.3¢-3¢ per share, to be paid out in FY15. From the IPO net proceeds of $19.3m, the bulk (54%) will be to expand its operations locally and in other markets and diversification into other luxury lifestyle businesses, while the remaining will be used for general working capital (22%) and listing expenses (24%). Financially, net profit grew 181% to $7.6m in FY12 and slipped 12% to 6.7m in FY13. This came on the back of a revenue gain of 5.4% to $113m in FY12 and a 23.5% slump to $86.4m in FY13, while gross profit margin steadily improved from 11.7% to 19.9% in the three year period.