Novena IPO Offers 11m Shares At 23.5 cents Each

By Ling Su Ann
Dec 12, 2000
The Business Times

SESDAQ-BOUND furniture retailer Novena Holdings yesterday launched its initial public offering of 11 million shares at 23.5 cents apiece.

The offer comprises 1.1 million retail and 9.9 million placement shares, including a reserve tranche of 2.75 million shares.

The shares are offered at a historical price/earnings ratio of 4.7 for the year ended December 1999 and a prospective P/E ratio of 7.6. On an enlarged basis, the issue price is an 18.1 per cent premium on the company's net tangible assets per share of 19.9 cents.

The offer, which represents 16 per cent of Novena's enlarged share capital, is expected to raise about $1.7 million net. Of this, $400,000 will be used for new projects and $1.3 million for working capital.

Novena started with one outlet in in 1984 and now has 20. It has expanded into furniture manufacturing, exporting and wholesaling. Countries it exports to include South Africa, Taiwan, the Philippines and Japan.

It also has two factories and warehousing facilities in China.

To boost business, Novena plans to expand its Singapore retail network and integrate its e-commerce activities.

It made $1.8 million gross profit {note for SPH use} on turnover of $16.9 million in the six months to June 30 this year. For the full year, it expects gross profit of $2.8 million on turnover of $35.2 million.

This is slightly lower than last year's gross profit {note for SPH use} of $3 million because of outlet closures and relocations, as well as a weaker demand for pricier furniture. The IPO closes this Thursday and the shares are expected to start trading on Monday.

Overseas Union Bank is manager, underwriter and placement agent for the IPO.