SINGAPORE (July 17): Pain management services provider Singapore Paincare Holdings (SPCH) launched its Initial Public Offering (IPO) on the Catalist Board of the Singapore Exchange on Monday.
Incorporated on December 31 2018, the company focuses on the treatment of patients suffering from chronic pain. Their services include “minimally invasive procedures, cancer pain treatment, specialised injections, pharmacotherapy and cognitive behavioural therapy,” chief executive officer Bernard Lee details.
Additionally, it offers primary care and other services, such as general medical consultations and dermatology services.
These services operate under two specialist clinics – the Singapore Paincare Center and Paincare Center – and four medical clinics: Lian Clinic, Horizon Medical Centre, AE Medical Clinic and New City Skin Clinic.
Its upcoming IPO sees the company placing 24.246 million placement shares at 22 cents each. Another 90 million ordinary shares will be allotted, pursuant to its restructuring agreement.
The offer is substantially higher than the group's unaudited net asset value (NAV) per share of about 9.86 cents on Dec 31 2019, based on the post-placement share capital of over 161.6 million shares. At this level, it will have a market capitalisation of $35.56 million.
The IPO is priced at approximately 17.74 times the price-to-earnings of SPCH’s FY2019 net profit.
Novus Corporate Finance, a Singapore-based corporate finance and strategic advisory firm is its sponsor and issue manager, while UOB Kay Hian is its placement agent.
To Lee, SPCH’s listing is a milestone. “We aim to make the [company] brand synonymous with long-term, sustained pain treatment as well as business and clinical excellence,” he asserts.
In its most recent 1H20 ended June, SPCH’s unaudited earnings was up 85.4% to $1.14 million, from the $616,000 logged the previous year. This follows a jump in revenue to $5.1 million, double the $1.98 million recorded the previous year.
Lee attributes the increased income from a higher take up of pain management services over the years.
To this end, the company has earmarked the $5.3 million gross proceeds from the placement to expand its business operations.
Specifically, 1.1 million or 20.6% will go into expanding its range of pain care services to traditional Chinese medicine, and non-medical rehabilitive services such as physiotherapy, osteopathy, homeopathy and health spas.
“This will help our company to provide a wider spectrum of pain treatments such as rehabilitation, exercise and training programmes,” explains Lee.
“We will improve the standard of alternative medicine practitioners by increasing their knowledge and also making them a part of our post-care ecosystem”.
“There is also potential for an increased patient base from such alternative services for our specialist and primary care services,” he says in explanation of the $1.4 million or 26.3% of IPO funds set aside for local and regional expansion.
Of the remaining funds, $1.0 million (19.5%) will go into its working capital while the remaining $1.79 million (33.6%) will be used for listing expenses.
Looking ahead, the company intends to recommend and distribute dividends of not less than 70% of earnings FY20, 21 and 22.
“Our ability to declare dividends to our Shareholders in the future will be contingent on our future financial performance and distributable reserves of our Company,” says Lee.
“This is in turn dependent on our ability to implement our future plans, and on regulatory, competitive, technical and other factors such as general economic conditions, demand for and selling prices of our products and services and other factors exclusive to the medical industry”, he adds.
