Security firm IPS Securex has announced plans to list on the Singapore Exchange's Catalist board in an initial public offering (IPO) that could value the company at $26.25 million.
It intends to launch 12 million new shares at 35 cents apiece, according to its preliminary prospectus lodged with the Monetary Authority of Singapore yesterday.
The placement will close at noon next Thursday with trading expected to start at 9am on June 30.
The $2.7 million expected to be raised from the IPO will be used for growth plans, with $2 million earmarked for its long-term security maintenance business and the rest to expand its product range.
After listing, the public will own 16 per cent of the firm, while parent company IPS Technologies will have 62.2 per cent.
IPS Securex chief executive Kelvin Lim will hold a 16.8 per cent stake. The remaining 5 per cent will go to the rest of the firm's board.
Mr Chan Tien Lok, non-executive chairman of IPS Securex, is the major shareholder of IPS Technologies.
IPS Securex, which was set up in 1986, distributes imported security products and works in checkpoint and event security, building surveillance and law enforcement.
The firm has worked on security for Housing Board flats, commercial buildings and several schools in Singapore.
It has also provided services for global sporting events and even defence forces in certain countries.
Mr Lim expects most of the firm's revenue to come from its security maintenance business.
"Orders for the maintenance and leasing business already surpass that of our security solutions business," he said.
Only 29 per cent of revenue came from its maintenance business in the 12 months to June 30 last year, with the rest from security solutions, but 73 per cent of its $24.5 million order book now is for its maintenance and leasing division.
Mr Lim said the firm will focus its sales and marketing efforts in the Asia-Pacific region, where it has a presence in Vietnam, Malaysia, China, Australia and India.
Net profit was $235,000 for the six months to Dec 31 last year, down from $836,000 in the same period a year earlier.
This was mainly due to listing expenses of $401,000.
Revenue which dipped to $3.8 million from $4 million in the same period a year earlier is mainly attributed to a decrease in the firm's sales in Vietnam and Malaysia.
Net asset value per share as at Dec 31 last year was 5.2 cents, up from 4.8 cents in June the same year.
This article was first published on June 21, 2014.
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