It certainly has that feel about it. Also this news from the AFR could be helping. Why would I buy into the Pioneer IPO at 11-11.8x FY15 profit when I can buy CCP with it's track record at 11.5x FY14?
Pioneer Credit Ltd, a financial services company that buys bad retail loans off banks, will seek to raise $40 million from institutional and sophisticated investors on Thursday ahead of an ASX listing on May 1.
As revealed by Street Talk online on Wednesday, Pioneer boss Keith John has been in front of fund managers over the past fortnight, explaining his business to potential new investors.
The Perth-based company purchases bad personal loans and credit card debt off the major banks, and focuses on recovering those debts. It expects to buy $30.4 million of debt in the 2014 financial year and wants to increase that number to $37.9 million in 2014-15.
Pioneer expects to report a $4.5 million net profit in the 2014 financial year and $6.6 million the year after. Revenue is forecast to increase from $25.3 million this year to $39.1 million. New investors have been offered 42 million to 45.4 million shares. Post raising, Pioneer’s John will own up to 19 per cent of the company.
It is seeking to raise $40.2 million at $1.60 to $1.85 a share to return some money to existing shareholders and fund future debt portfolio purchases. The offer is priced at 11-to-11.8-times forecast 2015 financial year profit.
If successful, it would list with a $72.6 million to $77.7 million market capitalisation on May 1.
Broker Evans & Partners will launch a bookbuild on Thursday, ahead of prospectus lodgement on Friday.
Fund managers have compared Pioneer Credit to rival debt collection agencies Credit Corp Group and Collection House.
CCP Price at posting:
$8.76 Sentiment: None Disclosure: Held
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