Managing director Nick Debenham says the listing will give the company’s staff an opportunity to share in the future success of QM.
“The company has been growing for about 25 years and we are one of the largest players in our principal market. Our core business of providing print and mail services for essential communications provides a solid business foundation for the company to generate sustainable returns for investors,” says Debenham.
“Fundamental to the company’s success has been our strategy of applying technology to provide new and enhanced services. Our e-business revenues grew by 25 per cent in FY2005 and we have blue-chip client relationships and a strong new product pipeline that provide potential for further growth.”
The IPO will raise proceeds of $48 million, with $4.3 million to assist in funding QM’s growth and proceeds of $41 million being paid to the vendor shareholders.
QM reported revenue of $53.84 million and EBIT1 of $9.50 million in FY2005, and has grown strongly over the past two financial years based on increasing market share and continued industry growth coupled with rapid expansion of its range of e-business services.
From available information, QM estimates the Australian customer communication outsourcing market that its services address grew by 8 per cent to 9 per cent in FY2005 and totalled approximately $600 million. QM outpaced this estimate of industry growth in the same period, increasing total revenue by 17 per cent in FY2005.
Future plans for QM include possible expansion into Western Australia and New Zealand, leveraging QM’s software IP to develop new products, continued market share increases and potential acquisitions.
Management have forecast total revenue of $59.01 million and EBIT of $11.26 million for FY2006, representing growth rates of 9.6 per cent and 19 per cent respectively. Forecast earnings per share is 18.1 cents. Based on an offer price of $2 per share, the forecast FY2006 price/earnings ratio is 11.0 times.
Subject to meeting directors’ forecasts, QM expects to declare a fully franked dividend of 7.2 cents per share for FY2006. Based on the offer price, this represents a forecast dividend yield of 5.87 per cent grossed up 12 months.
After listing, QM will have 44.5 million shares on issue, 53.9 per cent of which will be made available to new shareholders under the offer. The offer will comprise 3.5 million new shares and 20.5 million vendor shares.
The offer will be open from 9am (Sydney time), October 17 until 5pm, November 9 2005.
Trading in the shares of QM Technologies is expected to commence on the ASX on November 18, 2005.
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