With Australian seafood consumption rising, food processing company Catalano’s Seafood is set to upgrade its Seafood Management Solution via an IPO seeking to raise $5 million to expand its ‘ocean-to-plate’ distribution network.
Founded in 1969, the Perth-based seafood company has established itself as a vital supply chain partner within the aquaculture industry that provides food processing services to some of the largest fisheries in Australia.
Amongst its key wholesale customers are Austral Fisheries, Marine Produce, Ocean Grown Abalone and others, as well as Curtin University which commissions Catalano’s to provide the physical processing research component as part of the university’s seafood R&D program.
Catalano’s also operates a retail division which operates three Company-owned stores in Perth, three branded sections within IGA supermarkets and six unbranded sections within independent supermarkets.
For the Financial Year ended 30 June 2021, Catalano’s Seafood generated $17.1 million in revenue which was a 40% increase on the previous year’s $12.2m – a figure impacted by COVID-19 where shutdowns to the hospitality industry impacted the entire seafood industry.
Despite the bump in revenue in line with the resumption of fine dining and general hospitality, Catalano’s Seafood was unable to revert back to profitability in FY21 when incurring a $0.50m net loss after tax, a slightly worse figure than the $0.46m from the year prior. This was not uncommon amongst its peers in the seafood industry however with similar sized peers.
Under its proposed IPO, Catalano’s Seafood is seeking to raise a minimum of $5 million at an Offer Price of $0.20 per share, with a maximum raise of $6 million before applications are closed or scaled back. Should the maximum be reached, it would give the Company an indicative market cap of $17.5 million upon listing on the ASX.
The primary use of funds raised will be applied towards upgrading Catalano’s processing equipment and increasing its sales and marketing capabilities. The Company will also look to apply $600k of the funds raised towards its Seafood Management Solution which would support targeted rollout of its products to independent and franchise owned supermarkets.
According to IBISWorld research, seafood consumption has increased per capita in Australia in the past five years and is expected to increase further in 2021-22.
In FY21, the estimated value of consumption was 26.3 kilograms per capita however IBISWorld forecasts the value in 2025-26 to be 27.5 kilograms per capita.
As a family-run business, Catalano’s Seafood is headed by Nick Catalano who will continue to serve as CEO and Executive Chairman upon listing, with his 2.12% stake in the Company to be diluted down to 1.41% from the IPO.
RM Corporate and Auspac Financial Advisory are acting as the Lead Managers for the IPO which is not underwritten.
According to their Prospectus, the IPO Offer is expected to close on 10 February 2022 with a proposed listing date of 24 February 2022 under the ASX ticker ‘CSF’.
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
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