News: Baby Bunting seeks up to $52M through initial public offering

Australia’s largest baby products retailer Baby Bunting is seeking to raise up to $52 million through an initial public offering priced at $1.40.

The company currently operates 33 stores across the country and generated sales of $180.2 million and EBITDA of $12 million for the 12 months ended 28th June 2015.

It is forecasting sales of $218.6 million and EBITTDA of $13.5 million in FY2016. It is also targeting a dividend payout of between 70% and 100% of its net profit.

Baby Bunting plans to expand its network to more than 70 stores and believes it can open four to eight new stores each year.

It is targeting five new stores during FY2016 – including two stores opened in the financial year to date.

The current addressable market for baby goods in Australia is estimated to be worth about $2.3 billion per annum.

While market demand is underpinned by resilient long term drivers, such as the number of births and population growth, the industry is highly fragmented across small independent speciality retailers, a number of online only retailers and a few larger retailers where baby goods are part of their overall offering.

The company will trade as BBN on the ASX.