IPO Watch: Rate My Agent puts itself on the market with $12m offer
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Rate My Agent reckons it can raise $12 million in just 11 days when it opens its IPO prospectus.
The real estate agent comparison website opens its offer on June 4 — and will close it on June 15.
The main shareholders are only letting go of 12.6 per cent of the company though, valuing the business at $92 million with shares going for 25c each.
Rate My Agent allows punters to rate the agent and agency that helps them to buy and sell property. But the product is targeted at agents themselves, who can sign up to a free version or pay fees for greater prominence on the site.
Rate My Agent says 27,000 agents have signed up to the service.
It says it covers 77 per cent of active agents in Australia and 30 per cent of those pay monthly subscriptions.
The company says it’s listing to increase its footholds in the US and New Zealand, and start looking at other markets.
As a property market player, a downturn in Australia’s housing market — an issue that has become daily fodder in the media — could be a risk for investors.
It’s an issue Rate My Agent has fingered, saying a downturn resulting in lower agent advertising on the site could hit their bottom line.
It also noted that it might have to pay back some or all of $2 million in R&D tax incentives since 2015.
“There is a risk that the some or all of the R&D tax incentives received to date could be required to be repaid (plus interest and penalties) in the event that audits of the claims are conducted and it is determined that the requirements of Division 355 of the Income Tax Assessment Act (1997) have not been met in full or in part,” it said in the prospectus.
The company offered minimal financial information in its prospectus but does expects to make a first half profit in fiscal 2018.
That profit of $224,000 is thanks to a sizeable R&D grant.
The company has managed to almost triple sales however, rising from $873,000 in the first half of 2017 to $2.8 million in 2018.
The company made a full year loss in 2017 of $2.9 million, on sales of $2.5 million.