@InvestoMan ... Stockbroker Taylor Collison has closed off a fully subscribed $17 million raising by Big River and will bring forward the ASX listing a few days from the original May 8 listing date.
Not often you see an early listing date.. good luck to the both of us buddy! Lets see if OMBB can deliver us another pearler. Only had wins through them lately (probably picking the right ones) Also have UUV and THC waiting in the winds
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Big River boss says detached housing to stay strong
by Simon Evans
NSW-based timber and steel building products firm Big River is eyeing further acquisitions in a highly-fragmented sector as it heads to the ASX unperturbed by the prospect of any slowdown in Australia's housing construction markets.
Big River managing director Jim Bindon said on Thursday the apartment market was the only sub-sector, to which it supplied timber, steel and flooring products, that was likely to slow down in the next few years, with civil engineering and infrastructure projects, detached housing and commercial construction all poised for solid growth.
"The other segments that we play in are going to pick up the slack," he said.
Mr Bindon said the detached housing construction market was only running at long-term average levels, while the infrastructure projects planned by governments meant there was substantial activity.
Commercial building activity still hadn't recovered to the levels seen before the GFC.
Big River makes and sells a range of softwood and hardwood timber and steel products used by around 2,700 professional builders and construction companies and wants to expand through the acquisition of privately-owned timber yards and other operators in a sector where there are more than 2,000 small players. Many of those businesses are family-owned without clear succession plans.
"It's a very fragmented industry," Mr Bindon said.
Stockbroker Taylor Collison has closed off a fully subscribed $17 million raising by Big River and will bring forward the ASX listing a few days from the original May 8 listing date. The company has an indicative market capitalisation of $77 million at the issue price of $1.46 per share.
Sydney private equity firm Anacacia Capital, which acquired a controlling stake last year, isn't selling down any shares in the initial public offering, with major shareholders escrowed until late 2018.
Sales revenue is forecast to be $201 million on a pro-forma basis in 2016-17, rising to $207.3 million in 2017-18. Net profit after tax is projected to increase from $5.99 million in 2016-17 to $6.9 million in 2017-18. The company has manufacturing facilities at Grafton and Wagga Wagga in regional NSW and runs 12 sales and distribution centres which cover the major capital cities in Australia.
Big River derives 31 per cent of its revenues from customers building multi-residential housing, 29 per cent from residential housing and 25 per cent from commercial building projects. The remainder comes from civil infrastructure and industrial customers.
In early March it spent around $7.5 million buying the Adelaide Timber and Building Supplies business from home builder Rivergum Homes. Rivergum Homes is a major customer of Big River, with the supply of building products to that firm representing about 7 per cent of Big River's total annual sales.
Big River is chaired by Greg Laurie, who is also a director of furniture group Nick Scali. Other directors include Malcolm Jackman, who is a former managing director of agribusiness and pastoral company Elders Ltd.
A small part of Big River's timber and building products business competes against the trade part of the Bunnings big box retail and trade warehouse outlets owned by Wesfarmers, and the Mitre 10 operations owned by Metcash. Woolworths exited from that sector with the $3 billion shutdown of Masters.
Mr Bindon said the quarterly value of work completed by builders and construction firms had grown at a compound average growth rate of 4.8 per cent from mid-2001 to December, 2016, and when there were tougher times in one part of the construction market it was generally offset by other segments.
BRI Price at posting:
0.0¢ Sentiment: Hold Disclosure: Held
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