Booktopia lists at a premium, to trial robots at distribution centre

Shares in online bookseller Booktopia have debuted on the ASX at a 24pc premium, as it turns to robots to aid its expansion.

Booktopia CEO Tony Nash, at its distribution centre, where it will trial robots. Picture: Britta Campion/The Australian

Shares in online book retailer Booktopia have listed on the ASX at $2.86, representing a 24.3 per cent stag profit on the initial public offer price of $2.30, as investors warm to businesses engaged in the digital economy that has boomed through the COVID-19 pandemic.

Booktopia was founded in 2004 in Sydney by chief executive Tony Nash, Simon Nash and Steven Traurig, who remain major shareholders in the group which is set to expand next year with the use of robots on their distribution centre to ramp up speed and efficiency.

Under the terms of the prospectus, Booktopia sold 10.9 million new shares in the company and 7.9 million existing shares at $2.30 per share, giving the company a market capitalisation at the offer price of $315.8m.

Of the total proceeds of $43.1m, Booktopia said $25.1m would be applied to fund growth through further investment in the company’s 14,000sq m distribution facility in Sydney, increasing stock and working capital, listing costs, employee shares and paying down debt. Nearly $18.1m will be paid to existing shareholders.

Shares traded as high as $2.90 and later closed at $2.72.

Before the shares hit the market on Thursday Booktopia provided a trading update, saying that based on unaudited management accounts for July to November 2020, the key trading measures, including total units shipped and average order value, were tracking in line with forecasts provided in its prospectus.

It also announced that the first stage of its investment of $20m into the distribution centre was complete and fully operational in time for the traditional pre-Christmas sales period.

“Stage 1 has increased outbound potential capacity from 30,000 units to 60,000 units per day, and includes a purpose-built mezzanine, more conveyor lines and new packing machines,” the company said.

It will commence a trial of autonomous robots at the distribution centre in early 2021.

“The robots can increase operational efficiency by up to four times and increase storage capacity by 80 per cent,” it said.

The robots can move heavy payloads and reach up to 5m, allowing the distribution centre to add more high-density shelving, increasing capacity over time from 600,000 units to 1.8 million.  “We are expecting our biggest Christmas ever and with the ability to process up to 60,000 book sales a day, we will be able to satisfy more customers,” Booktopia CEO Mr Nash said.

“The upgrade is the culmination of many years of planning and millions of dollars of investment in technology, automation and additional stock to meet the demands of our customers.”

Booktopia attracted boutique investment house Ellerston Capital, 117-year-old conglomerate Washington H. Soul Pattinson and Su-Ming Wong of Champ Ventures, Perennial and Regal Funds management.

Booktopia, founded 16 years ago, is the largest Australian-owned online book retailer.