How Has This ASX Debutant Been Performing – ASX: CLB?

How Has This ASX Debutant Been Performing - ASX: CLB?

LA-based Confectionary food manufacturer Candy Club Holdings Limited (ASX: CLB) completed its IPO successfully on 19 February 2019. Under its IPO, the company issued a total of 25,120,020 fully paid ordinary shares and in turn raised $5,024,004 before costs. The shares were issued at $0.20 per shares, and the shares closed at $0.235 on a listing day on 19 February 2019.

How has CLB performed since listing?

From the business operations standpoint:

The company recently reported a positive update on its operations front. The wholesale division (B2B) had shipped to its 750th independent retail partner. The company achieved this milestone within 250 days of beginning of its operations. Considering that it took two quarters to secure its first 375 independent retail customers, the rate of growth is very encouraging and shows strong momentum as it bagged its next 375 independent retailers in just over 60 days!  It exhibits a run rate of 5 new retailer customer per day. Further, the company has witnessed repeat orders from those customers who received shipments in 2018, and the reorder rate is in excess of 50%.

Also, the content powerhouse Buzzfeed recognised Candy Club as the 6th best place to buy candy on the internet, and under the “best of” survey, Candy Club was ranked ahead of See’s Candy (8th), Walmart (9th) and Sugarfina (10th).

On the opportunity and outlook front, the company continues to see strong product sell-through, helped by its high close rate and the reorder patterns experienced by the company. Moreover, Club Candy is also targeting regional and national accounts across the USA, and test orders have been shipped to or in the process to chains like Bed, Bath and Beyond, Spencer’s Gifts, Hot Topic, etc.

Furthermore, the company recently expanded its customer reach by expanding into twelve additional airports and casino resorts across America. Candy Club products are sold by speciality retailer Lick in Los Angeles, NY La Guardia, Dallas and Charlotte airports, and several high-profile resorts and casinos in the USA.

To aid the company in its current and future growth initiatives, the company successfully secured a revolving financing line of up to USD 1 million from CircleUp Credit Advisors.

On the management front, the company reported the resignation of its Non-Executive director, Mr. James Baillieu due to relationship difference with another Non-Executive director of the Company, Mr. Zachry Rosenberg.

The company reported a cash and cash equivalent of $1,722,500 and Net assets at $1,907,571 post its IPO. The Net assets included the shares issued to its lead broker, and its associates as consideration for services rendered during the IPO process.

From the stock price standpoint:

The stock of the company closed the listing day on 19 February 2019, at a price of $0.235 and since then the stock price has been in a downtrend. The stock of the company last traded at $0.120 (as on 26 April 2019) resulting in a drop of 46.81 percent since its listing. It has dropped by 29.35 percent in the last one month.

The market capitalisation of the company stands at $17.39 million with 139.09 million shares outstanding.


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