L&P Global Berhad successfully debuts on the ACE Market of Bursa Malaysia Securities Berhad under the Industrial Products and Services sector and carries the stock name of L&PBHD (Stock Code 0268).
At the opening bell, despite a downward market condition the share opened with a price of 42 sen, representing a premium of 40% to the initial public offering price of 30 sen, and a trading volume of 19,985,400 shares.
The Group has raised a total of RM33.9 million from its IPO exercise, of which RM13.0 million or 38.4% will be deployed as working capital. Meanwhile, RM10.0 million or 29.5% is allocated for capital expenditure to set up a new factory in Johor and another RM2.0 million or 5.9% has been earmarked for business expansion. Lastly, RM5.0 million or 14.8% is reserved for the repayment of bank borrowings while the balance of RM3.9 million or 11.5% will be utilised to defray listing expenses.
Executive Director-cum-Chief Executive Officer of L&P, Miss Ooi Lay Pheng said, “Our listing today marks a significant milestone in L&P’s 38 years of business history. More importantly, the new-found listed status and fresh funds raised will enable us to expedite our expansion plans and elevate us to the next phase of growth.”
“With our utilisation rate for the seven-month period ended 31 July 2022 at approximately 90%, we need to ready ourselves with additional capacity to take on new businesses. Furthermore, against the macro backdrop of the ongoing US-China trade tension, MNCs are relocating and setting up new manufacturing facilities in the South East Asia region. This bodes well for us, as increase in manufacturing activities will result in higher demand for industrial packaging products.”
As compared to plastics and metal, wooden industrial packaging is deemed more environmentally friendly given that wood is biodegradable, and the manufacturing process produces lower carbon emissions.
“Wooden industrial packaging products will continue to play a crucial role for businesses to transport goods throughout the supply chain as they are cost-effective and environmentally friendly. We will also be expanding our circular supply services whereby we collect, repair, recycle, repurpose and resell used industrial packaging product, thus extending the useful lifespan of the wood resource.”
“Our ability to be an approved vendor to global MNCs demonstrate our scale and capabilities in meeting the stringent quality and just in time delivery requirements of the customers. Leveraging on our established track record and competitive strengths, we are excited to strive towards our vision of creating sustainable solutions across supply chains,” she added.
For the unaudited 9-month results for financial period ended 30 September 2022 (“9M FPE 2022”) as announced on 28 December 2022, L&P reported a profit after tax (“PAT”) of RM11.4 million on the back of RM112.8 million in revenue. After adjusting for one-off expenses incurred, including IPO corporate exercise expenses and legal fees, of approximately RM1.27 million, the Group’s adjusted PAT would have been RM12.7 million.
This is a positive uptrend from the audited 7-month results for financial period ended 31 July 2022 (“7M FPE 2022”) PAT of RM7.9 million and revenue of RM83.8 million.
The improved financial performance was mainly due to an upward adjustment in selling price in the financial quarter ended 30 September 2022 as a result of increase in cost of raw materials.
In terms of dividend policy, L&P targets to maintain a dividend payout ratio of 20% to 50% of the Group’s annual net profit (the profit attributable to the owners of L&P).
Alliance Islamic Bank Berhad is the Principal Adviser, Sponsor, Sole Underwriter and Joint Placement Agent for L&P’s IPO exercise.