Shaky global sentiment towards growth stocks has not deterred road tolling technology developer EROAD from registering a prospectus for an institutional capital raising worth up to NZ$40 million.
Between 10.5 million to 13.3 million new shares will be issued and existing EROAD shareholders have offered to sell shares up to 5.1% of the shares currently on issue at an indicative price range of NZ$3.00 to NZ$3.80 a share.
Steven Newman, the CEO and largest shareholder, and each of the directors will retain their shareholdings.
EROAD earned NZ$10 million in sales and a NZ$2.9 million net profit in 2014 and is forecasting NZ$19 million in sales 2015 and NZ$34.1 million in 2016.
Based on the indicative price range, EROAD will have a market capitalisation of NZ$180 to NZ$228 million on listing. The final offer price is expected to be set on 29 July at the completion of a bookbuild involving New Zealand brokers and institutions.
Shares are expected to begin trading on the NZX Main Board on 15 August.
“An IPO has been a long standing part of the company’s plan and now is the right time because we have achieved the milestones we set for ourselves, including proving our business model in New Zealand, and launching in the USA and Australia," Newman says.
“We are confident that we have the ability to execute our growth strategy. We have developed a robust, scalable platform with the security and other features capable of providing road charging and compliance services as well as fleet management."
A swag of technology companies have listed or plan to list on the NZX this year, including SaaS travel managmeent company Serko, utility software maker Gentrack, field data capture company IkeGPS and cinema management software company Vista Entertainment Solutions.
However, Serko's share price fell on listing last month from an offer price of NZ$1.10 to 94 cents today. SaaS accounting software maker Xero has experienced even bigger falls, from nearly NZ$45 in March to NZ$23.60.