LED and photonics technology manufacturer ProPhotonix Ltd finally made it to Aim more than four months after its first official Aim admission notice.
The flotation shows that it is still not easy for small companies to raise money. The fact that its head office and registered office are in the US even though it manufactures LED arrays and engines in Cork, Ireland and laser diodes in the UK.
Back in August, ProPhotonix said that it was joining Aim at the end of September but its arrival was delayed a number of times. The company did include $194,000 of AIM admission costs in its figures for the three months to September 2010, following a $511,000 charge in the previous quarter. Today’s flotation means that these and the subsequent costs were not wasted.
However, ProPhotonix did not raise as much cash as it originally wanted. A range of £5m-£10m was put on the fundraising in the first announcement in August, which would have led to an expected valuation of £20m. Broker and nominated adviser Libertas must have had some confidence in raising this amount or it would not have published that figure. It proved impossible to achieve that target, though.
The figure was revised to £6m in September, £4m in October, £900,000 at 20p a share in early December and then to around £830,000 in the middle of December.
ProPhotonix did raise £825,000 from a placing at 20p a share in the end but the conversion of $1.27m of debt into shares at the placing price meant that £1.6m of new shares were issued. The market capitalisation at the placing price was £10.5m.
The stated net proceeds of the placing were £615,000, but that does not include the £375,000 of flotation costs previously incurred so the real net figure is £240,000. That is similar to the chief executive’s annual salary after he took a 10% pay cut last year.
Loss-making ProPhotonix’s core market has historically been the machine vision sector but it has been making inroads in the medical sector.
Revenues dipped from $14.8m to $10.5m in 2009 but revenues have been recovering in 2010. In the first nine months of 2010, ProPhotonix reported higher revenues than in the whole of 2010. The loss is reducing.
Both sides of the business are recovering but the LED operations are growing at the faster rate.
The share price remains unchanged in initial dealings.
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