JIM SEEKS $10M PRE-IPO INJECTION

Written on the 22 June 2012

JIM SEEKS $10M PRE-IPO INJECTION

BOOMING franchisor Jim’s Group hopes to raise $10 million in a pre-initial public offering (IPO) and plans to use proceeds to establish business start-up loans for new franchisees.

“From general advice, it would seem that an IPO would be premature at this stage. I’d be interested in a suitable investor or investors, especially if they had appropriate skills or contacts that could help get the business to a stage where an IPO would make sense,” says founder Jim Penman (pictured).

He reveals the group is booming with 3200 franchisees and franchisors in Australia, New Zealand, Canada and the United Kingdom.

“In 2010, we took 414,831 leads, of which 65,457 were unserviced. In 2011, we took 439,335 leads of which 80,817 were unserviced; demand for our services rose 6 per cent while franchisee numbers grew only 4 per cent; unserviced leads rose by 23 per cent,” he says.

“Our problem is that more and more franchisees are getting booked out and unable to take more work. In some areas we’ve completely eliminated advertising, but there’s still too much work coming in.”

Penman predicts the number of franchisees will hit 3600 by 2014, but concedes there would be up to 5000 if prospective franchisees could source finance more easily.

“One of the main reasons for the float is to be able to offer vendor finance to franchisees. There is actually a huge demand for franchises, but we lose hundreds of sales a year because the banks won’t lend the money to new franchisees,” he says.

The group established 20 years ago operates 30 divisions including Jim’s Cleaning, Jim’s Bookkeeping, Jim’s Mowing, Jim’s Pool Care, Jim’s Test & Tag and Jim’s Dog Wash.

It employs more than 6200 people, services up to 100,000 customers a week and has 455 franchisees in Queensland – 210 of which are based in Brisbane.

Penman estimates the company, which generated $450 million in revenue during the 2011 financial year, is worth at least $50 million. However, he predicts his iconic brand will be worth more in years to come.

“Jim’s could be a $1 billion company one day. The only barrier to growth is capital,” he says.

“We see a 30 to 40 per cent return on equity. I have a great business and have a lot of confidence in it.”

He points to an estimated 95 per cent brand-recognition rate.

“How many companies in Australia have listed that have the same brand recognition as Jim’s? We are up there with giants such as McDonalds, but when you compare size we are like a gnat to an elephant,” says Penman.


Latest News

CSIRO HELPS DEVELOP AUSTRALIAN PHARMA COMPANY FROM $10 MILLION TO $305 MILLION

GOVERNMENT backed scientists have helped multiply the market value of a previously small Australian pharmaceutical...

FROM SECOND HAND MOTORCYCLE DEALER TO LEADER OF THE PACK

MOTORCYCLE Holdings (ASX: MTO) founder and managing director David Ahmet (pictured) says he often gets asked wheth...

HOW TO PROTECT YOUR BUSINESS FROM RANSOMWARE

BUSINESS owners are being warned to prepare and protect themselves from the type of ransomware attacks which hit A...

NUFARM SHARES SURGE TO FIVE YEAR HIGH ON BIG TURNAROUND

After a heavy loss in 2015 because of major restructuring, crop protection company Nufarm (ASX: NUF) has swung to ...

Related News

RAY OF HOPE FOR SLATER AND GORDON AS LENDERS STEP IN

EMBATTLED law firm Slater and Gordon (ASX: SGH) has announced to the ASX that it has launched confidential discussion...

SPROUTX PROVIDES THE SEED FOR AGTECH STARTUPS

AGTECH innovation fund SproutX has opened applications for its first accelerator round, backed by $10 million from...

GAS PRICES MAY FORCE BRICKWORKS TO TAKE MANUFACTURING OVERSEAS

BRICKWORKS Limited (ASX:BKW) chairman Robert Millner says soaring energy prices may force the company to turn to offs...

CHINA CONTINUES TO COLLECT AUSSIE PROPERTY ASSETS

CHINESE coin continues to dominate Australia's offshore real estate investment market, accounting for almost h...

EVENTS COMING UP

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter