BARTERCARD LAUNCHES $58.5M FLOAT

The trade-exchange operator, which has been in private hands for more than 20 years, is offering 28 million shares at $1 each in an IPO that opens on July 31.

The new entity, BPS Technology, is expected to list on September 4 and is pitched at a price-earnings ratio of 9.0 times with a projected dividend yield of 7.5 per cent.

According to non-executive chairman Murray d’Almeida, the company will control the world’s largest trading exchange and position itself to become a leading software provider to trade exchanges around the world through its ownership of the Tess and Bucqi platforms.

“It is the combination of the established Bartercard business, the rollout of the proven Tess Platform and the launching of the Bucqi Platform, an innovative loyalty and payment technology, that the directors believe positions BPS as an exciting opportunity,” says d’Almeida in the company’s prospectus released today.

BPS Technology has forecast a net profit after tax of $6.5 million for the 2015 financial year and a 7.25c dividend per share.

Bartercard processes more than $600 million transactions a year through 24,000 merchants and 54,000 cardholders across Australia, NZ, UK, USA, Thailand, United Arab Emirates and Cyprus.

The company says it will be primarily focused on business-to-business transactions and loyalty programs and plans to increase cardholder numbers to 100,000 by 2016.

The business will generate revenue through fees it charges for each transaction, as well as sign-up fees and franchise fees for new territories.

It is targeting revenue of $51.6 million this financial year.

BPS estimates there are 2000 trade exchanges operating globally transacting more than $US20 billion in goods and services a year.

The company currently generates 57 per cent of its income from Australia and 23 per cent from New Zealand.

“The purpose of the offer is to raise capital to bring Bartercard into the listed environment, provide BPS with funds to acquire Bartercard NZ, provide working capital to assist in the rollout of the Tess and Bucqi Platforms and exploit the considerable global growth opportunities available to BPS after listing,” says d’Almeida.

“The founders intend to hold their shares and will enter into escrow agreements, which will preclude them dealing with their shares for two years from the date of listing.”

The public float is expected to deliver a handsome profit to Bartercard management which bought out the company for $25.5 million in 2007.

BPS directors Trevor Dietz (CEO), Tony Weise (CFO) and Brian Hall (COO) own 9.5 million shares each in the new company, with a further 2 million held by Philip Scott.

New investors will hold 47.86 per cent of the company.