HOME improvement and construction supply retailer Wilcon Depot Inc. has set the indicative price range for its initial public offering (IPO) at P5 to P5.68 per share, underwriters of the company’s maiden share sale said in a briefing on Friday.
Justino Juan Ocampo, executive vice president of First Metro Investment Corp. (FMIC), said the price for Wilcon’s IPO is based on its growth potentials and as compared to prevailing retailers in the market.
“We benchmark it as a retailing company. Domestically, we’re looking at Puregold (Price Club Inc.) and Robinsons Retail (Holdings Inc.) as its comparables,” Ocampo said during the briefing.
Puregold stocks were last traded at P45 each on Friday while Robinsons Retail closed at P81.20 per share.
FMIC is one of the joint lead underwriters of the IPO together with BDO Capital & Investment Corp. FMIC is also the issue manager and bookrunner for the offer.
Ed Francisco, BDO Capital president, said: “They really are a retail play. About 97 percent of [Wilcon’s] revenue [is]retail. So imagine, their cash cycle is good. When all these infrastructure and houses are built, they will buy [home essentials],” Francisco said.
“Even if you’re earning dollars, it will be sent back to families and they’re going to be here. I think Wilcon will benefit from that. We believe in that strong consumer play in the country,” he added.
With the indicative price range, Wilcon should be able to raise up to P7.92 billion in fresh funds from the sale of 1.393 million shares. Net proceeds of the IPO will be used to finance its expansion activities, refinance debt, and for general corporate purposes.
The final offer price will be announced on March 17 while the offer period will run from March 20 to 24. Listing on the Philippine Stock Exchange (PSE) will be on March 31 with the ticker symbol “WLCON.”
Wilcon plans to increase its outlets to 65 by 2021 under a five-year store expansion plan which is expected to cost as much as P6 billion.
“We plan to solidify our presence in existing markets and expand our foothold in fast-growing cities outside of Metro Manila by putting up more stores in the next three to five years. We opened our first branch this year in Butuan last January. We plan to build about 28 more stores, seven of them to open this year in Bacolod,
Cagayan de Oro, Tacloban, Silang, General Trias and other areas that have high growth potential,” Wilcon Chairman William Belo said.
Mark Belo, Wilcon chief financial officer, said a Wilcon branch requires about 8,000 to 9,000 sqm of retail space and costs about P250 million, inclusive of operating capital. He said it will take five to six years for an outlet to break even.
With 37 stores as of end-2016, Wilcon’s product lineup includes tiles and flooring, plumbing and sanitary wares, electrical and lighting products, hardware and tools, furniture, furnishings and houseware, paints, and building materials, among others.