SINGAPORE - TrickleStar Limited, a producer of energy saving products, has lodged a preliminary prospectus for a planned initial public offering (IPO) on the Singapore Exchange's Catalist board.
Details of the pricing, amount to be raised, and timing of the offering have not yet been announced.
TrickleStar is primarily in the business of designing and supplying energy-saving products such as advanced powerstrips, load controllers, energy meters, energy monitors and surge protectors. These products are purchased by electric utilities, energy efficiency programmes, implementation contractors and energy auditors in the United States.
The company is headquartered in Malaysia, which also serves as its corporate office, and has a sales office and main warehouse facilities in the US in order to serve customers in North America.
Its manufacturing is outsourced to an independent contract manufacturer established in Taiwan, which operates its manufacturing facility in China.
Based on the prospectus lodged on Friday, TrickleStar posted revenue of US$12.8 million for fiscal 2018. Net profit for the period was US$2.0 million, up from US$670,384 a year ago. Earnings per share stood at 2.94 US cents, from 1 US cent a year ago.
In fiscal 2016, the company posted a net loss of US$258,498, with a loss per share of 0.39 US cent on revenue of US$9.0 million.
Following the completion of the placement, the firm is planning a dividend payout ratio of no less thant 50 per cent of its consolidated net profit after tax, whether as an annual or interim dividend. This is excluding non-controlling interests, and non-recurring one-off and exceptional items.
That being said, the intention to declare dividends is not yet legally binding and there is no assurance that dividends will be declared or paid in the future, said TrickleStar.
Expected controlling stakeholders of the company after the placement are CircleBright Limited, which will hold 41.6 million shares in the company.
Executive chairman and CEO Bernard Emby will hold 6.7 million shares in the company, and is further deemed interested in the 41.6 million shares held by CircleBright. Non-executive non-independent director Gunananthan A/L Nithyanantham, is also deemed interested in the stake held by CircleBright.
To date, the company has an issued and paid-up share capital of S$6.2 million comprising 66.8 million shares, which will be increased following the placement, the prospectus said.
In the next 12 months, the company is expecting a potential increase in raw materials and production costs in the short to middle term as a result of tariffs from the US-China trade tensions. It is also expecting operating expenses to rise from expenses related to the placement and listing.
Proceeds from the IPO will be used to scale the firm's presence in markets it is operating in, expansion into new geographical markets and establishing new sales channels. It will also be used for product development; acquisitions of products, businesses and assets; as well as general working capital purposes.
Key risks to business include a dependence on the continued service of its management team, key executives and employees - particularly Mr Emby and Mr N Gunananthan - who would be difficult to replace due to their combined expertise in the energy efficiency industry, the firm said.
It is also reliant on a limited number of independent contract manufacturers, limited suppliers for certain key components and qualified professional staff to create and design its products.
It may also be "materially and adversely affected" by any failure to maintain an effective quality control system on independent contract manufacturers and competition from industry players.
PrimePartners Corporate Finance is the sponsor, issue manager, and placement agent for this IPO. The placement is not underwritten.