Investors have welcomed apparel retailer Best & Less Group (ASX: BST) with open arms today, sending the company's share price up more than 8 per cent on news the company exceeded results forecast in its prospectus.
The company, which sells affordable clothes for babies, children and adults and was founded by the late Berel Ginges in 1965, debuted on the ASX today following a $60 million initial public offering (IPO) at $2.16 per share, giving it a market capitalisation of $271 million.
Since commencement of trade shares in the company have been on the rise, up 8.8 per cent at the time of writing, increasing the company's value by around $32 million.
"Today marks another milestone in the history of Best & Less Group, which has served generations of families across Australia and New Zealand," BLG CEO Rodney Orrock said.
"By focusing on mum and her family and by continually delivering what we call 'twice the quality at half the price', we have developed a very loyal following.
"We will maintain our customer-first philosophy as we embark on the next phase of our growth journey as a listed company."
The Sydney-based retailer's IPO, which had "significant excess demand", followed a strategic $40 million equity investment from BB Retail Capital (BBRC) - a private investment firm founded and chaired by retail entrepreneur Brett Blundy.
Blundy, an Australian billionaire whose company counts Sanity, Bras N Things and Aventus Property Group in its portfolio, will join the BLG board as BBRC's nominee.
The strong investor response to the company's debut can be chalked up to BLG's strong trading performance and results in FY21, achieved despite on-going COVID-19 related shutdowns impacting the Australian and New Zealand store networks.
For the 52 weeks to 27 June 2021, BLG delivered total unaudited revenue of $663.2 million, exceeding prospectus forecast for the period of $657,7 million.
Total revenue growth in FY21 versus the prior corresponding period was up 6.1 per cent, with like-for-like revenue growth for the period of 10.8 per cent, exceeding the prospectus forecast of 8.9 per cent.
The company expects FY21 EBITDA to exceed the prior corresponding period by more than 100 per cent and to outperform the prospectus forecast of $60.7 million by approximately 15 per cent.
"Best & Less Group delivered a very strong trading performance in FY21, despite on-going COVID-19 related disruption in Australia and New Zealand," Orrocks said.
"This result is a pleasing validation of our strategy and demonstrates the power of our value proposition, our focus on the baby and kids apparel segments, our broad omnichannel sales network and our integrated vertical retail model."
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