NSL Foods Plc, a manufacturer and distributor of packaged meals, is preparing to go public in May with an initial public offering (IPO) of up to 75 million shares or 25% of its total shares.
Proceeds from the IPO will be used to build a 350-million-baht factory for ready-to-eat meals at Amata City Chonburi Industrial Estate and for debt payment.
The new factory is scheduled to start some production lines in 2023 and to be fully completed by 2024. Production will focus on three product lines including frozen meals, ready to-eat meals and retort pouches.
The IPO price will be announced in the first week of May and NSL Foods is set to begin trading on the Stock Exchange of Thailand (SET) within May. Asia Plus Advisory Co has been appointed as its financial adviser for the IPO.
The company is the leading sandwich manufacturer and distributor to 12,000 7-11 convenience stores nationwide under SET-listed CP ALL Plc with more than 40 bakery SKUs (stock keeping units). The firm's production capacity is as high as 1.25 million pieces per day.
The distribution of products to 7-11 convenience stores accounted for about 90% of the company's total sales, a contract that will end in 2026. However, the company hopes to extend the Memorandum of Understanding (MOU) with 7-11.
NSL Foods also wishes to increase its business with other stores to 30% of total sales by 2023.
"Although the economy has been hit hard by the Covid-19 pandemic, NSL Foods has learned to adapt quickly to the changing situation and was able to overcome the challenges through a 'Nutrition Sustainable for Life' strategy," said Somchai Asavapiyanond, president of NSL Foods.
The company expects its revenue to grow no less than 6 billion baht over the next five years (2021-2025), he said.
In 2020, NSL Foods generated total revenue of 2.93 billion baht, of which 2.76 billion baht came from bakery and snacks while 132.6 million baht came from its food service business unit. This unit was acquired in 2019 and began to contribute revenue in 2020.
The company's 2020 revenue dropped 13% due to the outbreak of the pandemic. Meanwhile, the company's net profit margin grew to 5.2% from 4.6% in 2019. The increase of net profit margin was due to cutting costs.
In 2021, the firm projects a sales growth of 16% with minimum revenue of 3.5 billion baht.