Regency Petroleum Limited (RGL) has released its IPO prospectus. Here's a #SOTRSummary:
-looking to raise up to 287M
-Opens November 24, Closes December 8
-Each share will cost 1.00
-Brokered by GK Capital
-Selling Agents (JMMB & VMWM)
Overview of Regency
-100% Jamaican owned
-incorporated (May 30 2019)[**2018 seen in report]
-sells cooking gas (bulk and retail) and automotive gas (1 service station and 1 on the way for Q1 2023)
See details below.
This message from the CEO gives a better synopsis of the business, changes made prior to IPO, and the strategic initiatives in play.
The Ask
- Regency is seeking to raise up to 287M via listing on the Junior Market
-the proceeds of the raise will be used to pay costs, to complete the construction of their 2nd service station, pay debt & for CapEx.
Shareholdings
CEO is the only noted shareholder pre-invitation. Post issuance, subject to full subscription, 8% will be in the hands of the general public with approximately 12% between GK Investments, staff, & strategic partners.
It must be noted that GK Investments holds Regency debt which they have the option to convert to equity.
GK has opted to convert said shares at the stated discount with the remaining balance being repaid in cash from the proceeds of the IPO.
Dividends
The company has stated a dividend policy of up to 30% of profits.
Note that dividends are not guaranteed and given Regency's growth stage, they may opt to use cash to reinvest in the business.
Governance
The company has a diverse board that consists of individuals with experience in business, strategy, law and accounting.
Their mentor is @hugoagraham, founder and CEO of listed $PTL.ja.
Industry Overview & Outlook
The company provided a decent synopsis of the industry within which they operate. Please read it. Not much information about their position in the market.
Do they make money? (2021 vs 2020)
-short answer. yes.
-long answer:
-Sales ⬆️213%🔥🔥
-Profits before taxes ⬆️381%🔥🔥🔥(margin=13%)
-positive and growing operating cash
-debt to equity was 0.4x
Have they made money this year? ( year to date to June)
-short answer. yes.
-long answer:
- Sales ⬆️34%
-Profits before taxes ⬆️46% (margin=15%)
-positive and growing operating cashflows
-debt to equity was 0.32x
Note that the convertible debt was after the June quarter end.
Please read further details re financial performance below:
**We do note that the 6 month #s are more than half of full year pre-tax profits thus far.
Using the full amount of shares post IPO, a trailing profit before tax figure of 93M JMD and the listing price of 1, Regency is being listed at an estimated Price to Earnings of 15.42x.
Price to book is more than 10x.
What are the risk considerations?
Please see below a list of the risk factors associated with the company and the listing.
How to apply?
-JMMB and VM have been listed as selling agents so this will likely be available on their respective IPO application platforms.
-GK has provided an IPO application form as well in the prospectus.
jamstockex.com/regency-petrol…
We have reached out to the CEO of Regency and have invited him to our monthly meeting on November 25 2022.
Stay tuned for updates on this and a possible YouTube discussion with the CEO on the offering.
Will you be participating in the Regency IPO?
Let's discuss in our 2,000 member strong community here:
t.me/+LoPrrHCLGYQ3Z…
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