Latitude Financial Group Limited (ASX: LFS) is scheduled to list on the ASX at the end of this week.
Latitude Financial describes itself as a leading digital payments, instalments and lending platform, with 2.6 million customer accounts and more than 1,950 merchant partners across Australia and New Zealand. It has products like LatitudePay, Genoapay, Gem Visa, GO Mastercard and Creditline. It also offers lending products like credit cards, personal loans and motor loans.
Latitude Financial’s Upcoming IPO
Latitude Financial has been thinking about listing for a long time, but we’re nearly there.
It had previously been hoping to price the initial public offering (IPO) at a range of $2 to $2.25. Last week the price was set at $2, the bottom of its price range.
But according to reporting by the Australian Financial Review, the owners have lowered the offering to $1.78 per share so that the IPO will happen and that it trades well after the IPO.
This new price will mean it’s valued at an earnings multiple of 11 times profit and with a dividend yield of 5.8%.
Latitude Financial had been looking to raise $1.24 billion, but this lower price will probably mean the total offer is likely to be smaller.
In FY20 Latitude Financial expects to generate $1.1 billion of operating income and $287.6 million cash net profit. It’s going to be the biggest IPO this year if it goes ahead.
It’s got a good chance of happening because already one third of the offer has been taken up by regular retail investors. The rest will be raised from institutional investors via its brokers of Goldman Sachs, Macquarie Group Ltd (ASX: MQG) and UBS.
Is It Worth Buying Latitude Financial?
Latitude Financial sounds like it could be an interesting idea for dividends, but I’m not really a fan of loan/lending/instalment businesses for my own portfolio. There’s a lot of competition and I’m just not sure how much more growth there is in the instalment space.
I prefer the idea of the growth shares in the free report below instead of Latitude Financial.
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