IPO of Latitude Financial Services

[RooFlyer]

What do people think about the up-coming IPO of Latitude Financial (they run the 28 Degrees card), co-managed by CommSec? Worth putting some Super money into?

According to the e-mail I got from CommSec – ‘ The offer is for approximately 622.4 million shares issued by the Company (expected ASX code: LFS) (Securities), at an indicative price range of $2.00 to $2.25 per Security, to raise up to $1,400.4 million.’

How popular do you think the offer will be? That will drive the final price, and the resultant dividend yield etc Broker firm opens 4 October, closes 14 October, bookbuild is 15/16 October

From CommSec:

Key Offer Statistics
Issuer	Latitude Financial Group Limited (ACN 625 845 883) and Latitude SaleCo Limited (ACN 625 845 874)
Proposed ASX Code	LFS
Indicative Price Range	$2.00 - $2.25
Final Price / Pro forma LTM Jun-20 Cash NPAT per Share	12.4x – 13.9x
Enterprise value / Pro forma LTM Jun-20 Adjusted EBITDA	7.8x – 8.8x
Total number of Shares on issue at Completion of the Offer (million Shares)	1,778.2
Market capitalisation using the Indicative Price Range ($ millions)	$3,556.5 - $4,001.0
Total proceeds under the Offer ($ millions)	$1,244.8 - $1,400.4
Total number of Shares available under the Offer (millions)	622.4
Total number of Shares available under the Offer / total number of Shares on issue at Completion of the Offer	35%
Implied annualised 1H20 forecast dividend yield using the Indicative Price Range	5.2% - 4.6%

 

[drron]

The only worry I have is the old saying-big IPO's come at the top of the market.Of course nobody follows the old rules now.

 

[Buzzard]

Both currently around $27, I'd sooner buy ANZ or NAB.
Dividends are reasonable and both will certainly go over $30 in the medium to long term.

 

[moa999]

It's 95% an old school credit card Business, yet they are selling it on the basis of the recently launched LatitudePay and trying to get AfterPay like multiples

 

[tgh]

In the past I have had some good wins from IPO's and there is always a steady stream of stuff from the broker but I seldom participate these days.
Let the market decide the price and go from there

 

[samh004]

I'm not sure what to think. I thought they were trying to get into loans, hence the need to raise capital. It could be a good time to disrupt. I own shares in 2 majors and 2 smaller banks currently, so I probably shouldn't be looking to un-diversify my portfolio, but if they grow well in the medium to long term then buying in at $2 would be lovely for my ROI.

 

[Dr Ralph]

I've been offered a broker allocation of $100k. Seriously considering taking this up. Hoping to stag and move on.

 

[cove]

I will stay with MQG which is Macquarie Bank as their record is pretty good. I went to their AGM this year. They have gone up $100 a share and their dividend and earnings are strong.

 

[Dr Ralph]

I will stay with MQG which is Macquarie Bank as their record is pretty good. I went to their AGM this year. They have gone up $100 a share and their dividend and earnings are strong.

Got a good stag profit on their recent $15,000 SPP in the last month.

 

[cove]

Have never sold a share in Macquarie Bank ever so that nest egg grew nicely.
Consumer finance turns to cough if there is a slow down in the economy. No one knows when that will happen but Latitude loses a lot in bad debts each year even during the “good times”.

 

[cove]

I keep thinking “lipstick on a pig” on this one at that proposed pricing.

 

[andy2015]

Both currently around $27, I'd sooner buy ANZ or NAB.

What are you actually trying to say here?

 

[Buzzard]

What are you actually trying to say here?

That at the price I mentioned I would sooner invest in ANZ or NAB instead of the discussed IPO.

 

[Buzzard]

Laugh all you like @sjk but ANZ & NAB happen to be the 5th and 6th largest holding by Vanguard's VAS ETF which comprises 296 holdings last I looked.

 

[cove]

The latest hire purchase we did on a new car with NAB was at 3.29%. They probably will end up owing about a couple of billion to customers they stiffed.
ANZ was the slowest at repaying their customers that they stiffed. Mrscove was at the Royal Commission in Melbourne when that was discussed.
I hold shares in the top 5 banks because they know how to make money with fairly low bad debts.
Latitude make money but lose a lot of it on bad risk lending.

 

[amaroo]

Is this the new mob run by an ex-postie?

If anyone is keen maybe take a read of this....

WeWork's IPO-killer gives his Afterpay verdict

NYU professor Scott Galloway slammed WeWork's float and is now targeting the buy now, pay later sector, one with smart businesses and one big problem.

www.afr.com

 

[Flying mermaid]

I keep thinking “lipstick on a pig” on this one at that proposed pricing.

Totally agree - it’s a case of don’t trust private equity bearing gifts. It’s not that I think Latitude is a bad play. Ahmed Fahour is a bit of a whizz, they are getting into BNPL etc etc. However PE tend to have a long history of dressing up things to make a quick buck. It’s one I prefer to stand off from and look at again after they have come out with a couple of sets of figures. They need good IT systems to make the move from cards to BNPL and has there been an investment in that or is it yet to come. Also massive competition in the BNPL sector and more all the time. (Disclaimer I looked at Afterpay when it was $3 and didn’t like it - so I am definitely not all that good, or maybe too cautious ).

 

[Quickstatus]

I baulked at Afterpay as well because my accountant saw the potential regulatory issues with money laundering

 

[Buzzard]

I baulked at Afterpay as well because my accountant saw the potential regulatory issues with money laundering

Afterpay was suggested to me as an investment. It's easy to look back and say I should have.

 

[RB]

An opinion piece in the SMH today 'Don't buy now': Expert urges investors to steer clear of Fahour's Latitude float