Latitude Financial Services, credit cards and consumer finance company, has kicked off marketing for its run at the ASX-boards, with sponsor brokers sending detailed "investor education" reports to fund managers.
According to Andrew Lyons and Desmond Tsao, Goldman Sachs analysts, they thought Latitude was the second largest non-major bank player in the non-housing personal lending market, and its outlook was "constructive". By June 2020, Latitude will likely to have a "healthy" return on equity of 20.6%. The company’s sponsor brokers are expected to spend the coming fortnight marketing to fund managers, before company management makes its pitch. If successful, Latitude is likely to be the largest IPO in Australia this year.
Latitude's closest competitor in the buy now pay later sector Zip was trading at 8-times revenue, while companies similar to their traditional business were trading at up to 15-times forecast profit.
The owners of Latitude are expecting to target a $3 billion to $4 billion valuation. In the 2018 financial year, the company recorded $999.9 million operating income and $248.4 million proforma cash profit. This 2019 financial year, an increase to $1.06 billion and $278 million is greatly expected.
Source: The Australian Financial Review
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