IkeGPS eyes US market listing, first needs cornerstone shareholder

IkeGPS [NZX: IKE], the laser measurement tool developer, is mulling a US listing but is first looking for a cornerstone shareholder from its major market.

The US-based company told shareholders at today's annual meeting in Wellington that it's actively seeking US investors and didn't rule out a possible secondary listing there. The company has appointed specialist investor relations advisory firm MKR Group to help find US-based strategic investors. The firm's shareholders include New York-based Sterling Grace which holds 5.4 percent, according to NZX data.

"Certainly the option of looking at a listing is something we're considering, but there's a huge amount of analysis that needs to go into that before we progress things," chief executive Glenn Milnes told the meeting. "In terms of bringing those US investors, one barrier has certainly been being NZX-listed only for a large proportion of that market, not all of that market."

Blair Abraham, an assistant investment analyst from Harbour Asset Management, which holds a 5.2 percent stake in the company according to NZX data, sought reassurance from the company that shareholders' stakes wouldn't be diluted by a major new investor.

"The board are obviously looking to maximise the value for current shareholders through any kind of transaction," Milnes said.

Chairman Rick Christie said that the board was looking for a US cornerstone shareholder before any secondary listing.

"One of the precursors before actually doing any floats in the US logically could be getting a cornerstone there and then moving on from there," Christie said. "I'd hasten to say that these are early days - we don't quite know how this is going to play out, but certainly the intention of the board is to grow our investor base in the US and we're going about that in a professional way."

IkeGPS shares listed at $1.10 apiece last July in an initial public offering that raised $25 million, and last traded at 66 cents, having never traded up to its original issue price. The stock was punished earlier this year, touching a low of 62 cents, after the company said it would miss its 2015 revenue prospectus guidance because sales of Spike were running three months behind schedule.

One shareholder asked if the company was too optimistic when forecasting revenue and how much confidence the board had in its current revenue figures, while another shareholder said the share price is thrashed if expectations are missed. Christie said the board had worked on revenue recognition and was confident in the figures.

The chairman said the decline in ikeGPS shares wasn't all down to missing expectations. The tech sector in general came under pressure as a shift in global sentiment saw investors reassess valuations of tech-based, momentum stocks.

"You have to say the tech sector's rather fallen out of favour with investors, so I wouldn't want us to take the entire responsibility of where the share price of ike is," Christie said. "The whole market has dumped on the tech sector to some extent, just ask Rod Drury (chief executive of Xero) about that."

CEO Milnes told the meeting ikeGPS was eyeing up the insurance and real estate sectors as potential buyers of its Spike measurement devices.

(BusinessDesk)

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