NXT market launches today

The NXT market officially launches today with the compliance listing of mail company G3 Group.

The group comprises New Zealand Mail, Send, Pete's Post, Fastway Post and Universal Mail, as well as document management brands Filecorp and Eureka.

No capital will be raised from the listing, although its 53.8 million shares will be listed at 75 cents each, giving it an implied market value of $40.4 million.

G3's Universal Mail brand operates in Britain selling tourist stamps, while Pete's Post was one of the first independent operators to come from the deregulation of the postal industry in 1998. National Mail raised $12.7 million through an initial public offering and NZX listing in 2000, but closed after it failed to attract enough customers. Fastway Post provides business mail services.

The company is chaired by Rob Campbell, and major shareholders Evan Christian, Jason Butler and Steve Phillips are on its board as non-executive directors.

In 2014 the company reported earnings before interest, tax, depreciation and amortisation of about $3.5 million on sales of $30 million.

G3’s first report from NXT market independent research provider Edison Investment Research is available to the public on the NXT website.

The NXT market was announced by its parent NZX [NZX] last August and initially expected to launch in the fourth quarter of last year. The market registration and listing rules were approved by the Financial Markets Authority last September.

NZX chief executive Tim Bennett says the launch is a “key milestone in the development of New Zealand’s capital markets” which represents many years of work and consultation with the industry.

“The NXT market will provide capital to the next wave of New Zealand businesses, and for investors, the opportunity to gain exposure to these businesses via a liquid, robust marketplace.”

The market is aimed at small to mid-sized businesses with an expected market capitalisation of $10-100 million. The companies must have at least 50 members of the public as shareholders, who hold at least a quarter of the shares.

The market has a new disclosure regime, which is simpler for companies and investors to understand and comply with than the more rigorous continuous disclosure requirements of the NZX main board.

At least two independent directors are needed, plus a NXT-registered adviser must be taken on for three years. 

But there is no requirement under the newly-engineered Financial Markets Conduct Regulations for these companies to provide prospective financial information (PFI) to potential investors.

Rather, those listing on the new board must provide key operating milestones (KOM), which will include how the business should be assessed and monitored, although they are unlikely to include any financial information.

Other companies which have signalled interest in listing on the NXT board include turbine maker Hydroworks, Invivo Wines, and technology developers Straker Translations, Fronde and Booktrack. Cooks Global Foods says it intends to move over from the current alternative NZAX board.

All NXT listed companies will receive research and market making coverage, and there will be shorter market hours to concentrate liquidity.