- Australia’s largest online bookseller, Booktopia (BKG), has had a happy first day on the ASX as shares soared upon listing
- The company tapped investors for a neat $43.1 million in its initial public offering (IPO), which it says was significantly oversubscribed
- Investors were eager to hop on board after the company revealed record revenue for the 2020 financial year in light of a boost in demand from COVID-19-induced lockdowns
- This is the third time Booktopia has tried to go public; the company had to shelve a major IPO in 2016 due to low demand and then failed a crowdfunding campaign through Equitise in 2019
- Nevertheless, the company’s shares opened well-above its IPO price of $2.30 and hit an intraday high of $2.90
- Shares pared back the win slightly in the afternoon but still closed at a healthy $2.72 each
Book lovers rejoice: Australia’s largest online book retailer, Booktopia (BKG), has joined the ASX today following a neat $43.1 million initial public offering (IPO).
Booktopia is offered 10.9 million in new shares and 7.9 million in existing shares at $2.30 each, giving the company a market cap at listing of $315.9 million.
The company said this IPO was “significantly oversubscribed”.
Investors took kindly to the offer and shares in Booktopia surged on their first day on the market — first trading at $2.86 each and hitting an intra-day high of $2.90.
Another COVID winner
While the coronavirus pandemic has been devastating for people and countries across the globe this year, some businesses have seen a flurry of activity as people adjust to staying home in self-imposed or government-mandated isolation.
This was certainly the case for Booktopia, which saw a surge in sales this year as Australians were cooped inside their homes.
The result was record 2020 financial year revenue of $165.8 million.
The company immediately got to work ensuring it can keep up with this boost in demand, investing $12 million into a major upgrade of its Lidcombe distribution centre in Sydney.
According to the company, this will double its outbound capacity.
Booktopia CEO Tony Nash said the upgrade was finished just in time for the Christmas rush.
“We are expecting our biggest Christmas ever and with the ability to process 60,000 book sales a day, we will be able to satisfy more buyers, faster,” Tony said last month.
Of course, the COVID-19 demand boost has just helped support an already-growing business — according to the company, Booktopia has reported a compound annual growth rate of around 26.4 per cent from the 2015 financial year to the 2020 financial year.
Since its establishment in 2004, the company has sold over 35.5 million items to more than five million Australians and New Zealanders.
Third time’s the charm
This is not the first time Booktopia has tapped Australian investors for help in getting listed on the ASX.
In 2016, Booktopia had to shelve a major IPO of more than $100 million after institutions said retail risks and stark competition from Amazon outweighted Booktopia’s double-digit revenue growth.
The company then went a different route in 2019, chasing funding from investors through a crowdfunding scheme via Equitise.
Unfortunately, this too failed after the company raised less than a third of the minimum subscription needed for the capital raise.
Now, with the rising interest in the eCommerce sector and a pandemic to help move things along, it seems investors are more confident to back the major bookseller with their wallets.
“Since we sold our first book, we have ploughed millions of dollars and countless hours into building a dynamic, durable and scalable business,” Tony said.
“For the first time, the general public will have an opportunity to share in that success and be part of our future,” he said.
Booktopia plans to invest $25.1 million of the IPO earnings into further growth through investment into its 14,000 square metre distribution facility in Sydney. The money will go towards increasing stock, listing costs, employee shares, and paying down debt.
Around $18.1 million will be paid to existing shareholders.
“We would like to welcome all the new shareholders who are now part of the Booktopia journey,” Tony said today.
“We have a strong business with a clear strategy to retain our strong market position in Australia’s fast-growing online book market.”
Booktopia shares settled slightly from their intra-day peak but still closed at $2.72 each — well-above their offer price of $2.30.