Starbust (IPO)

Starbust IPO: Catalist listing Starbust has registered its prospectus in connection with its impending IPO, at an offer price of $0.31 per share. Starbust is aiming to raise net proceeds of ~$13.5m through an offering of 50m shares (48m placement, 2m public). Starbust controlling shareholders will hold an 80% stake in the company post IPO, leaving a freefloat of 20%. The proceeds from the IPO will be used for the acquisition of leasehold land and buildings, acquisition of plant and machinery and general working capital. As a background, Starbust is a Singapore-based engineering group specialising in the design and engineering of firearms training facilities, with a track record and experience of close to 15 years in a niche industry. The group’s customers include law enforcement agencies, military agencies, securities agencies and civil authorities in Asean and the Middle East. The group’s three main business segments are Firearm shooting ranges, Tactical training mock-ups and Maintenance services and others. Starbust recorded a net profit of $8.7m (+35%) and revenue of $21.0m (+21%) in FY13. As at 9th Jun ‘14, Starbust has secured contracts worth ~$45.8m, underpinning earnings visibility over the next one to two years. While the group has no fixed dividend policy, it intends to distribute at least 20% of its profit after tax for FY14. Based on the IPO price of $0.31, Starbust trades at 8.8x FY13 P/E and 1.97x P/B with a total market capitalization of $77.5m, versus its much larger UK peer Meggit PLC which trades at 17.1x trailing P/E and 1.91x P/B. The IPO offer is expected to be open on 3rd Jul ’14 at 9.00 am and close on 8th Jul ’14 at 12.00 pm, and will make its trading debut on 10th Jul ’14 at 9.00 am. DBS bank is the sole sponsor, issue manager and underwriter for the IPO.