Kitchen Culture Holdings Ltd is offering 17m new shares at $0.30 each via placement for a listing on Catalist. There will be no public offering and the offer will close on 20 July 12pm.
The Company specializes in the sale and distribution of a wide range of premium imported kitchen systems, appliances, wardrobes systems, household furnishings and accessories from Europe and USA. The company works closely with developer to market "higher-end" residential projects.
Revenue for FY10 reaches $31.2m with a net profit after tax of $4.3m. The Company intends to distribute at least 20% of its net profit for FY2011 and FY2012 as dividends. EPS on fully diluted basis for FY2010 is 4.3 cents and if the payout is 20%, the DPS will be 0.86 cents and based on the IPO price of 30 cents, the yield is around 2-3%. Assuming the service agreement was in place, the listing PER based on historical 2010 results will be around 7.7x. The market cap at listing is around $30m. Prior to listing, the company has already 'distributed' its cash to its shareholders for FY2010 of approximately $4.6m... (this is called milking it dry and then list it...which is not uncommon..).
Since there is no public offer, i have no further comments on the company. All the best to the two brothers who managed to list the company on Catalist. At IPO, the share price is fairly priced and the dividend yield may provide some attraction to investors seeking a better yield over the low bank rate.