Cape Town - The Appleton Group, the country's largest private investment management company, made a feisty debut in brisk trade on the JSE yesterday, with analysts expecting the freshly listed group to comfortably meet its earnings forecasts in its maiden year.
Appleton opened at R2,60 and hit an intraday high of R3,05 before tapering off to close at R3,03. It was a substantial 203 percent premium to the prelisting price of R1. Volumes on the day rose to a healthy 10,6 million after a slowish start.
Analysts noted that the listing was priced generously and consequently a lot of profit was left over for new shareholders.
Carel Oosthuizen, a banking analyst at BoE Securities, said the listing reflected the market's positive perception of the business. "The market is giving recognition to Appleton's solid track record," he said, adding that the group's earnings' forecasts should be well within reach.
Other analysts agreed but one cautioned that next year could prove tougher to meet targets.
Another said that, with a current forward price-earnings ratio of 35, the stock could not be regarded as cheap.
Appleton has forecast profit after tax of more than R30 million for the maiden year to February 2000 from R15 million previously.
Ian Kilbride, the Appleton chairman, was delighted with the level of interest shown by institutions and other market participants who bought up the 10,7 million available shares.
"We are fully committed, focused and driven to deliver on our promise of strong earnings growth in the years ahead," Kilbride said.
Appleton was perfectly poised to expand its dominant position in the high net worth market with significant cross-selling opportunities and a vast market, both locally and offshore.
The group offers a private banking service through its Appleton division and an investment banking operation through its other wholly owned unit, Unyson.
It also houses Irish Menell & Rosenberg, the private client stockbrokerage.