SILK Laser debuts on ASX to lift profile, fortunes
Cosmetic beauty business SILK Laser Clinics ended its first trading day on the local sharemarket at $3.58, four per cent higher than its listing price.
Cosmetic beauty business SILK Laser Clinics delivered new investors a glimmer of hope, ending its debut day on the Australian sharemarket four per cent higher at $3.58.
It came after a milestone celebration day for chief executive and co-founder Martin Perelman who said he came in “with no expectations” on how the stock would perform.
“Tomorrow morning we get back into it, primarily focusing on ourselves and our growth story.
“All the areas of our business are trading strongly and we know we are off to a great start on the journey,” he said.
SILK, trading under the code SLA, had raised $84m through the issue of 5.8m new shares and the sale of 18.4m existing shares at $3.45 each, giving it an estimated market capitalisation of $163m.
It ended the day with a market capitalisation of $168.7m.
The business, partially owned by equity firm Advent Partners since 2018, has 53 clinics and has a goal to grow to 150 clinics, mostly in the eastern states, in the next five to 10 years through a mix of acquisitions and new openings.
Co-founder Martin Perelman now holds a six per cent stake in the listed business with Advent owning 28.2 per cent.
Well-known listed companies investor HSBC Custody Nominees holds a 15 per cent stake, followed by JP Morgan and WC Capital.
SA-headquartered SILK offers laser hair removal, cosmetic injections and other skin and body treatments, including EmSculpt that has grown in popularity among celebrities, including Jennifer Lopez and Kim Kardashian.
The listing is designed to expedite its growth in a national non-surgical market worth more than $5bn per year.
Mr Perelman is promising better access to latest “lunch break” beauty fixes for its core demographic of predominantly females aged 20-49 years old with “40-plus busy mums” being the “sweet spot”.
“With more capital, we will be able to introduce new technology and techniques as well as more affordable treatments in easily accessible clinics at shopping centres or high streets,” he said.
“Beauty has always been a big business worldwide, and I think the growth of medical beauty is a new version of the same thing.
“It’s a version that is growing in popularity, acceptance and accessibility. We have clinics in blue collar and white collar locations, so affordability has also improved.
SILK is among Australia’s top three beauty treatment chains with private equity giant KKR-backed Laser Clinics Australia being the leader, followed by Cleanskincare Clinics, owned by ASX-listed Australian Pharmaceutical Industries.
Established in 2009, SILK’s clinics are a mix of company-owned, joint venture and other franchise operations employing 460 staff.
Three more clinics are likely to open this month – one in SA and two in Queensland.
SILK is forecasting $53.5m in annual revenue for the 2021 financial year, equating to 66 per cent growth, and $14m of EBITDA.
“Our clinics have continued to perform strongly throughout the year, and I am confident that with the funds raised we can continue to benefit from this momentum and further accelerate our growth.”
Unaudited year-to-date network cash sales are at $38 million, which continued to show positive momentum in the business and exceeded forecast expectations in the first two months of Q2 FY21 despite SA clinic closures in November due to a COVID-19 cluster outbreak.
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