Fliway float hits a bump

Fliway Group chairman Craig Stobo and major shareholder Gretchen Hawkesby at the firm's NZX listing ceremony. Photo / Christopher Adams

Investors likely to wait for track record to build.

Fliway Group shares slipped below their $1.20 offer price yesterday after the freight and logistics operator made its sharemarket debut in the first NZX listing of the year.

The Auckland firm's newly listed stock traded as high as $1.22 in the minutes after the 11am float, before falling as low as $1.16 and finishing the day down 0.8 per cent at $1.19, giving the company a market capitalisation of $54 million. More than 960,000 shares, worth $1.2 million, changed hands in 145 trades.

Grant Williamson, of sharebrokers Hamilton Hindin Greene, said many investors would wait until Fliway began meeting its targets.

"The company does have quite attractive projected fundamentals, but until the company actually meets those then investors will remain a little bit cautious about what is a relatively small-cap, new listing," Williamson said. "The company won't be rerated by investors until there's a bit of a track record behind it."

The Auckland firm raised $25 million through selling 20.9 million shares, below the 22.7 million set out in the prospectus.

That included $9 million in new capital that will be used to reduce debt and cover the costs of the float.

The offer price, set through a bookbuild process with institutional investors and brokers, was at the bottom of a $1.20 to $1.40 indicative range.

Fliway was acquired in 2006 by managing director Duncan Hawkesby, the son of former newsman John Hawkesby, and his wife, Gretchen, the daughter of Graeme Hart, New Zealand's richest man. Hart provided seed funding for the acquisition, which has since been repaid.

The couple have retained a 54 per cent stake in Fliway, which joined sector heavyweights Mainfreight and Freightways on the NZX.

Duncan Hawkesby said the focus was now on growth opportunities and "delivering on our numbers".

Fliway is eyeing acquisitions as part of its growth strategy, including a possible move into new industry segments such as dangerous goods and bulk liquid transportation.

Hawkesby said the company could potentially make an acquisition this year if the right opportunity arose.

Williamson said the freight and logistics sector was attractive for investors and there was potential for Fliway to replicate the success of Mainfreight and Freightways.

Established in 1977, the company operates five warehouses and 11 branches around New Zealand.

It has a 50/50 joint venture with US-based freight giant UPS, while also maintaining relationships with logistics operators in Australasia, Europe and North America.

The company delivers over two million pieces of freight in New Zealand annually. It handles roughly 9000 international shipments and 96,000 customs clearances each year, while employing 400 staff and operating 170 vehicles.

The company, chaired by Craig Stobo, is predicting a gross dividend yield of 8.1 per cent in the 2015 calendar year. It has forecast a net profit of $1.6 million from revenue of $85.3 million in the year to June 30. Profit is projected to rise to $2.9 million in the six months to December 31.

Fliway Group

• Established in 1977.

• Primary business activities involve transporting and warehousing freight throughout New Zealand.

• Employs 400 staff and operates 170 vehicles.

• Has forecast a net profit of $1.6 million from revenue of $85.3 million in the year to June 30, 2015