Turners Auction shares at 60 per cent premium on debut

Shares in Turners Auctions were trading at a 60 per cent premium to their offer price today in the year's most successful sharemarket debut.

Trading was going "gangbusters", according to one broker, as the shares swiftly rose above the opening price of $2.16 to $2.41 by mid-morning.

The car auctioneers offered four million shares last month at $1.50 each in a $6 million capital raising which was more than three times oversubscribed.

By midday about 640,000 shares had changed hands, worth almost $1.50 million.

Turners Auctions managing director Jeff Wesley, told NZPA he was pleased with the debut, although its popularity on the market was not surprising "if you've got four times as many buyers as sellers".

Mr Wesley admitted he was not experienced in the stock market and had not taken advantage of the staff pool of shares, although he had bought some for family members.

"I might very well in the future, I have an options package, but I don't have that much experience in the stock market, so most of my money has historically been in real estate.

"I certainly will be interested in the future in buying some," Mr Wesley said.

The market appeared to be breathing a sigh of relief following two underwhelming floats this year -- plastics packaging business Vertex, which listed in July at a 5 per cent discount, and agricultural equipment manufacturer Skellmax Industries, which has dipped 17 per cent from its issue price of $1.15.

However, the Turners stock pool was too small and tightly held to be covered by many brokers.

British-based investment company Guinness Peat Group has retained a 38.8 per cent stake through its subsidiary Ithaca, according to a substantial shareholder notice filed with the stock exchange this morning.

GPG signalled prior to the debut that its holding would slip from 45.7 per cent to 38.8 per cent. Bartel Holdings, a company ultimately owned by Ecuador's Alvaro Noboa family, the people behind Bonita bananas, has seen its stake drop to 21.9 per cent from 25.8 per cent.

It is unusual for shares to debut at such a large premium, and GPG New Zealand director Tony Gibbs admitted last month that the stock had probably been priced "miles too cheap".

Mr Gibbs said from New York today that he had kept track of the shares.

"The whole idea was to give it liquidity on the market, and that's exactly what's happened today -- there's a real market for the company's shares to trade in," he told NZPA.

"Before, it traded on the grey market which isn't an efficient market, it's now got a full board listing. The market will now decide what the price of the company's stock is on an informed basis."

There was no public pool of shares, with lead manager JB Were issuing shares to brokers and institutions.

Turners Auctions, the country's largest car auctioneer, was split off from the produce marketer -- and intended Enza merger partner -- Turners & Growers in April.

According to the prospectus, investors could expect rises of 15 per cent in operating revenue to $70.7 million, and 12.6 per cent in earnings before interest, tax, depreciation and amortisation to $9.6 million.

- NZPA