AEDGE Group's debut on the Singapore Exchange's Catalist board on Monday saw the counter close 5 per cent above its initial public offering (IPO) price of S$0.20. The stock ended the day at S$0.21, with some 2.6 million shares changing hands over the course of the day.
The firm - a provider of engineering, transport, and security and manpower services - said on Friday evening that all 16 million placement shares in its IPO had been validly subscribed for. The application monies received for these placement shares amounted to a total of S$3.2 million as at the close of the placement at noon on Dec 10.
Aedge had previously said it was looking to raise net proceeds of some S$1.7 million through the IPO, with this placement representing 15.1 per cent of the enlarged share capital of 106 million shares of the group.
Based on the given price, Aedge's market capitalisation stands at S$21.2 million after the placement. This translates to a price-to-earnings ratio of 59 times.
Aedge's chief executive officer and founder Poh Soon Keng said the majority of the funds raised will be used to finance the acquisition of property, plant and equipment, while the balance will be utilised for working capital. Aedge said it also intends to develop and test new security solutions in line with market needs, hire new staff and upgrade its human resource software to support its expanding operations.
The group's security and manpower services segment is its biggest revenue contributor. This segment includes security services such as guarding and system integration, cleaning services, as well as manpower services such as sourcing and supplying aerospace technicians to companies in the field.
Its transport services business operates a fleet of 88 buses that serve routes between nine residential estates and the central business district, as well as school bus services.
Although the group's engineering services division is its smallest revenue contributor, Mr Poh said the segment has been growing quickly over the past three years.
The Covid-19 pandemic had caused Aedge's net profit for FY2020 ended June to fall to S$400,000 from S$1.3 million a year ago, while revenue fell to S$23.7 million from S$24.5 million last year. Net profit margin, too, slipped to 1.8 per cent from 5.1 per cent.
The company had attributed the declines to fewer cleaning and security contracts, cancellations of ad-hoc transportation contracts, and lower utilisation of its bus services. This was partially offset by higher revenue from its engineering services segment due to more projects in the design and installation of scaffolding systems.
UOB Kay Hian is the sponsor, issue manager and placement agent for the listing, and will continue to be the sponsor of the company for three years from the date it is admitted and listed.