Hamish Fletcher

Hamish Fletcher is a business reporter for the NZ Herald

Investors take a shine to new tech stock SLI Systems

Co-founder Shaun Ryan strikes the gong as SLI debuts on the main board yesterday. Photo / Supplied
Co-founder Shaun Ryan strikes the gong as SLI debuts on the main board yesterday. Photo / Supplied

Shares in the newest member of the NZX, SLI Systems, have jumped 18.67 per cent from its initial public offer price.

The Christchurch-based technology company listed on the stock exchange yesterday and its shares climbed in early trading, eventually closing at $1.78.

Founded in 2001, the company - whose name stands for search, learn and improve - builds and sells search tools for online retailers, who are charged a monthly fee for these services. Some of its local customers include The Warehouse and Mitre 10 and further afield, London department store Harrods.

It raised $27 million in its initial public offering at $1.50 a share. Of that $27 million, $12 million was allocated to existing shareholders.

The other $15 million is being used to grow the business in the United States - at present the biggest market for e-commerce businesses like SLI - as well as in Britain and Australia.

The funds will be used to hire sales staff for these markets and to increase SLI Systems' existing team of around 120, says SLI chief executive and co-founder Shaun Ryan.

The company planned to take on about 50 staff by June next year, he said.

SLI also plans a push into Japan.

"We looked at a few of the Asian markets, we've decided Japan was the best fit because of the sophistication of the market," Ryan said. "It's fairly small physically, but is still very, very wealthy and e-commerce is sort of at a similar level to the other markets we've been selling into.

"We see there's not a lot of competition there."

Annualised recurring revenue - what the company would get if it kept all its customers and gained no new ones - was one of the company's "key numbers", Ryan said.

This was $17.7 million in February, expected to be $19 million in June and forecast to grow by 35 per cent in the next 12 months, Ryan said.

As well getting the capital to fund growth, Ryan said the listing would show SLI was "one of the major players" in its field.

"I think it's going to help with credibility for our larger customers and also partners. We are seeing a number of companies in the e-commerce space IPO as well, so it's quite nice to be part of the club, even though we're doing it on the New Zealand exchange."

- NZ Herald

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