Cluey Limited (ASX:CLU) marks flat listing on ASX

Summary

  • Cluey Limited (ASX:CLU) made a flat listing on ASX.
  • The company raised $30.0 million via the issue of 25.1 million fully paid ordinary shares at A$1.2 per share.
  • Almost one-third of the proceeds would be spent on sales and marketing.

Plethora of IPOs have been hitting the Australian market during the end of this year. The latest addition to this space is Cluey Limited (ASX:CLU) which hit the street today at the issue price of A$1.2. Despite a flat listing, the stock surged to an intraday high of A$1.35. On 10 December 2020, CLU is trading at A$1.230 at 1:23 PM AEDT, down 0.405% from previous close. The company has a market capitalization of A$ 147.65 million.

IPO Details

An online tutoring and learning support company, Cluey had successfully raised a total of $30.0 million (before the cost of the offer) via the issue of 25.1 million fully paid ordinary shares at A$1.2 per share. The shares offered under the prospect will represent 21.0% of the total shares on issue, and approximately 36.5% of the free float of total issued shares post the completion.

The cost of IPO itself is 11.3% of the IPO proceeds, that’s $3.4 million.   

Read More: What is driving the IPO frenzy?

Image Source: Shutterstock

The use of proceeds

The company intends to use 19.5% of the IPO proceeds to enhance it customer care, product, education, and technology. More than one-third of the proceeds amounting to $10.9 million has been aimed towards sales and marketing.

Image Source: Cluey’s Prospectus, Dated 8 December 2020

The company is also planning to use $9.9 million towards the working capital requirements. The management believes the proceeds from the offer would be sufficient to carry out its stated business objectives.

Financial Overview

The company has consistently exhibited revenue growth from $3,000 in FY18 to $4.86 million in FY20. Also, the gross profit of FY2021F is projected at $8.32million compared to the FY20 gross profit of $2.33 million.

Image Source: Cluey’s Prospectus, Dated 8 December 2020

The company has not been able to clock net profit till now due to high operating expenses. Nevertheless, a whopping $13.31 million is expected to be spent towards employee benefit expenses in FY21F, which is almost 160% of the projected gross profit.

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