http://www.nbr.co.nz/article/austral...al-cs-p-190416
Australian fund managers get a whiff of Trilogy International
Calida Smylie · Thursday June 16, 2016
Trilogy International chief executive Angela Buglass
Trilogy's Angela Buglass on why her company's raising cash
Trilogy International [NZX:TIL] was prompted to increase the liquidity of its stock by Australian fund managers who wanted a slice of the action.
The natural skincare and scented candle maker announced a capital raise this morning, with $20 million through a placement and $5 million to existing shareholders through a share purchase plan.
Money raised will be used to reduce the bank debt incurred to acquire beauty product and fragrance distributor CS Company and fund growth. Some will be kept aside for future acquisitions, although there is nothing in the pipeline right now.
Majority owner The Business Bakery, which underwrote Trilogy’s $10.1 million initial public offering in 2010 and owns 48.6% of the company, is selling $30 million of its shares – a 13% stake – at the same $3.70 price as the placement and share purchase plan. It will retain at least a 30% stake after the raise.
The Business Bakery – the investment vehicle for 42 Below Vodka founders Stephen Sinclair, Grant Baker and Geoff Ross (Trilogy’s chairman) – is doing particularly well out of its investment and has chosen a good time to sell down some of its stake.
Trilogy’s share price has risen an impressive 340% in the past year and 590% in the past two years, when it was at 58c.
The stock – which last traded at $4 – has been put in a trading halt until Trilogy tells the market it has reached the allocation sought.
Chief executive Angela Buglass tells NBR there has been a lot of interest in the capital raise already.
The Business Bakery chose to sell down its stake now after growing interest from Australian institutional investors but who needed more liquidity to be enticed in, Ms Buglass says.
“We have spent a lot of time recently with our Australian investors and, because the funds over there are so much bigger, they’re finding they can’t get access to enough shares. So, by balancing the Bakery portfolio, which still retains the majority shareholding, we’re able to offer more opportunity out to the market to invest.”
Australia is Trilogy’s largest market, producing 44% of group revenue, although the company faces more competition from local organic skincare brands than it does in New Zealand.
Interest from across the Ditch is also why the company is seeking a secondary listing on the ASX, where it hopes to list in the second half of the year.
Ms Buglass says a number of large Australian funds had “actively sought to meet with us” but many of them are mandated to not buy stock listed just in New Zealand. “The dual listing opens up much more opportunity for us.”
She also hopes greater liquidity could help Trilogy get covered by analysts, as so far none do.
The Auckland-based company more than doubled annual profit to $9.4 million in the 12 months to March 31 while revenue jumped 127% to $83.1 million.
The company's Trilogy and Goodness natural skincare brands were the biggest contributor to earnings, with revenue increasing 112% to $34.5 million and earnings before interest, tax, depreciation and amortisation up 116% to $11.5 million.
The natural organic skincare segment in the New Zealand pharmacy sector grew 21% and the Trilogy brand outperformed this at 39% growth, while in Australia, the market grew 27% while Trilogy grew 67%.
Its Ecoya brand – which produces candles and soaps – is also growing, with one Ecoya product sold every 23 seconds around the world. Sales increased 23% to $20.1 million and earnings were up 99% to $2.5 million.
The company as it is now came about after candle maker Ecoya listed at $1 in 2010 and soon after bought skincare business Trilogy for about $19 million. The name was changed to Trilogy International in 2013 after skincare sales started to dominate candles.
Recent acquisitions include a 25% of the largest rosehip oil producer in Chile, Forestal Casino, for $US8 million in cash and shares, and distribution company CS division was acquired for $37 million last August.
The company sells its skincare into 27 markets and especially focusing on the US, where it is stocked in a nationwide grocery chain.
Originally Posted by Balance
Reply With Quote
Bookmarks