Wilcon sets price range for public shares

Home improvement and construction supply retailer Wilcon Depot, the first company to debut on the local stock exchange this year, has set the indicative price range for its initial public offering (IPO) at P5 to P5.68 per share.

Industry sources estimated that at this range, the IPO will be priced at 16 to 19 times its likely net earnings for 2017, still a discount compared to retailing peers trading at over 20 times their projected earnings.

This equity deal will allow the company to raise at least P6.97 billion to as much as P7.92 billion. The proceeds will fund its expansion program for the next five years.

Wilcon plans to build a network of 65 stores with a net selling space of about 530,000 square meters in the next five years or more than double the current net selling area of about 250,000 square meters in its 37 stores, said Wilcon chair William Belo, who founded the company 40 years ago.

At present, Wilcon generates annual sales of about P55,000 to P60,000 from each square meter of selling space.

“We plan to solidify our presence in existing markets and expand our foothold in fast growing cities outside of Metro Manila by putting up more stores in the next three to five years,” Belo said.

“We plan to build about 28 more stores, seven of them to open this year in Bacolod, Cagayan de Oro, Tacloban, Silang, General Trias and other areas,” he added.

The 28 new stores will be large-scale stores, or Wilcon Depot branches, carrying 90,000 to 200,000 stock keeping units and catering to middle- and high-income accounts.

Average investment for each store is about P250 million.
Wilcon intends to list on the PSE on March 31 under the ticker “WLCON” after an offering period to be conducted from March 20 to 24. This equity deal is expected to bring 34 percent of its shares to public hands.

It was authorized to sell up to 1.393 billion primary shares, which will give it a market capitalization of P20.5 billion to P23.38 billion after the IPO. The final offering price will be announced on March 17. —DORIS DUMLAO-ABADILLA