Home fragrance retailer Dusk Group fails to light up on its ASX debut
While the majority of ASX IPOs in 2020 have performed well, that wasn’t the case for Dusk Group (ASX:DSK) on its debut.
Dusk Group is in the home fragrance trade which includes scented candles, diffusers, air purifiers and essential oils. It has over 100 brick and mortar stores and a gradually growing online presence.
Dusk estimated in its prospectus that it has 22 per cent of this market which represents $461.5 million in annual retail sales in FY20.
The company raised $70 million at $2 per share in a deal led by brokers Canaccord and Shaw & Partners.
At market open Dusk shares fell to $1.60 – a 20 per cent decline. While shares gradually recovered, as at 11.15am they still sat 13 per cent below their listing price.
The company’s drop on debut comes despite the solid performance of several other homeware stocks during COVID-19 and a financial update it released today.
Dusk’s total sales for October 2020 were up 38 per cent from October 2019 and online sales grew 116 per cent compared to the prior corresponding period in 12 months.
During the September quarter, its pro forma net profit after tax was $13.6 million – $1.1 million more than it had forecast in its prospectus. Its revenue also exceeded the prospectus forecast by approximately $1 million.
These were achieved despite all of the company’s Melbourne stores being closed during COVID-19 restrictions until last Wednesday.
CEO Peter King said Dusk Group’s listing on the ASX was a big day for his company.
“Today marks an important milestone in the growth and development of dusk. I would like to welcome our new shareholders and thank them for their support and vote of confidence in investing in dusk,” he said.