Initial public offers put up by private equity firms generally attract a fair degree of scepticism, but the doubters have been proven wrong in Scales Corporation's case.
Scales, the apple grower, logistics and coolstores firm, has seen its share price rally from $1.74 a year ago to close at $3.30 yesterday - a 89.7 per cent gain.
The company's shares were priced at the lower end of an indicative range in the IPO and they had a subdued debut, but the company has proven to be a quiet achiever. Scales listed in July 2014 at $1.61 - a 1c premium to their issue price - and weakened off a little in the first few days, but earnings since then have been impressive, driven in no small part by very strong demand for NZ apples in key export markets but also by its cool store and logistics divisions.
In February,the company said its net profit for the year came to $38.9 million, 87 per cent above its initial public offer forecast and a 112 per cent improvement over the full year.
In March, Hong Kong-based China Resources said it had bought a 15 per cent stake in the company for $56 million, or $2.60 a share, from the company behind the IPO - New Zealand private equity firm Direct Capital Investments. Scales said China Resources could provide support for Scales' business in China.