GK Capital Management makes successful foray in equity raising market

In an Our Today news follow-up… There was a full take up of the reserved shares in Jamaica furniture contract manufacturers JFP Limited’s initial public offer (IPO), which contributed to the offer being closed today, one day after its opening on Monday (February 21).  

The IPO was oversubscribed, attracting well over the $280 million initially sought. Lead broker and financial adviser to the offer, GK Capital Management Limited announced that there was full take-up of the reserved shares offered to “key strategic partners”, employees and GK Investments Limited.

Some 111 million shares were in the reserved pool with the remaining 168.4 million shares being snapped up by the general public. Final details regarding the allotment of shares will be provided via the JSE website.

Douglas Robinson, of GK Capital Management, praised his company’s successful foray into raising capital from the equities market.

According to him, “Given the prevailing strong market interest, we had anticipated the IPO would be oversubscribed and we are delighted at the result. JFP Limited has consistently increased in revenue on the back of delivering high quality and superior value to customers. Now, it will provide excellent shareholder value to investors as it continues on an upward growth trajectory.”

Big endorsement from equities market

Chief Executive Officer, Metry Seaga said: “I am thrilled at this endorsement from the market, and I want to thank all our investors. JFP has continuously delivered a great performance, even throughout the pandemic, by being innovative and focused. There is much more on the horizon for us to achieve and this is the best time to invest in our growth. You will be glad that you did.”

Seaga also referred to the future plans of the company saying, “the IPO will fuel our drive to expand our current factory and upgrade machinery to remain on the cutting edge. This will help us to increase efficiency and continue diversifying our product offerings to suit the myriad opportunities cropping up in the hotel industry and the casual dining and quick-service industry.”

Recognised as one of the Caribbean’s largest furniture contract manufacturers, JFP said its successful IPO demonstrates its belief in its steady rise over the past 36 years of operation. The company has delivered revenue growth over the 2016-2020 financial years at a compound annual growth rate (CAGR) of 11.6 per cent and delivered a 53 per cent gross margin during the 2020 FY, despite being rocked by the pandemic.  

Mobilising efficiently for more opportunities

Funds from the successful IPO will increase JFP’s working capital reserves which will allow the company to mobilise efficiently and take advantage of more opportunities for revenue and profit growth along with increasing our product offerings.  

With its factory being located in Kingston, Jamaica, JFP is centred in the heart of the logistics hub of the Americas and with the Caribbean Basin Initiative and may export into the United States free of duty. The company confirmed that it will be exploring the establishment of agent agreements throughout the US, CARICOM, and South-Central American markets in the short term.

As outlined in its prospectus, the company will apply to list on the Junior Market of the Jamaica Stock Exchange (JSE). If successful in its application, the furniture manufacturer would have the distinction of being the first furniture manufacturer to be listed on the Junior Market and it will also benefit from the applicable tax incentives.