Kremi maker priced at $375m

Wednesday, April 17, 2013

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CARIBBEAN Cream, the makers of Kremi ice cream products, aims to raise $75 million from its initial public offering.

At $1 a share, the company plans to sell 20 per cent of its total share, when the two-week-long IPO opens next Thursday.

The offer prices the company at $375 million, which is over six times its last reported earnings and likely four times its book value.

The company had $46 million in equity as at February 29, 2012, while it generated $59.7 million in net profit for the 12 months to November 30, 2012, which means that equity stood closer to $90 million as at the end of last November.

A $21 million revaluation of machinery and equipment was included in the most recent profit figures, which didn't take place in the previous year.

However, the ice cream maker has seen significant growth over the last five years.

Revenue climbed from $82.5 million in 2008 to $431 million for the year ended February 29, 2012. Sales increased from $289 million for the nine months to November 30, 2011 to $462 million for the corresponding period last year.

What's more, it shifted its operations out of purchasing ice cream mix and into manufacturing it last July.

The company wants to use the funds raised through the IPO to "further strengthen its operations, retool and improve its operational processes so as to fulfil its strategic plans and business goals, and improve the company's financial and non-financial performance".

More specifically, it plans to expand its plant, while increasing its working capital for other initiatives and covering the expenses related to the invitation.

The IPO, for which Stocks and Securities Limited is lead broker, is scheduled to close on May 10.

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