Convenience Shop eyeing April initial public offering

Grocery store chain Convenience Shop Holding plc has announced it will be offering 7.7 million shares to the public at an offer of 97 cents per share.

The offer prospectus, valid from 1 February to 10 March 2023, is available from authorised financial intermediaries and online.

The Convenience Shop group traces its origins to 2009, when the first outlet was opened in Ħaż-Żebbuġ under The Convenience Shop brand. Since then, the group has established itself as Malta’s largest network of grocery stores, with 83 outlets strategically spread across 48 localities in Malta and a head count of 750 employees.

The group boasts of a selection of over 2,000 different brands from over 140 suppliers, with its increased presence in various localities making its stores an attractive shopping destination for household goods.

Footfall in 2022 exceeded 11.2 million, a 14% increase compared to 2021, with total network revenue climbing from €59.7 million in 2020 to €63.3m in 2021, and now projected to reach €74m in 2022.

“The Convenience Shop Group embraces a philosophy which places a strong emphasis on corporate and social responsibility through financial and other support to various NGOs and vulnerable people. One of the first initiatives in this regard was the opening of ‘The Convenience Shop for Puttinu Cares’ outlet in Qormi in 2019, which operates for the sole benefit of the Puttinu Cares Foundation,” the group said in a company statement.

Share issue

The share issue is of 7,700,000 shares (representing 25% of the company’s issued share capital post-IPO), of which 1,000,000 ordinary shares will be issued by the company (new shares), while 6,700,000 ordinary shares will be offered for sale by the selling shareholders.

The shares are being offered at €0.97 per share. However, employees and franchisees of the Group as at 27 January 2023 will have the opportunity to subscribe for up to 1,052,631 shares at a price of €0.945 per share. Additionally, specific discounts will be granted to applicants subscribing for sizeable amounts.

The net proceeds from the new shares offer, expected to amount to up to €970,000 will be used for the general corporate funding purposes of the Group.

The sale of shares by the selling shareholders represents a partial realisation of their investment in the Company.

The Board of Directors intends to distribute 55% of the recurring free cash flow on an annual basis, subject to statutory requirements and availability of profits. The net dividend yield is projected to increase from 5.0% in 2023 to 5.8% in 2025, based on the IPO price of €0.97 per share.

The shares of The Convenience Shop (Holding) plc are expected to be admitted to the Official List of the Malta Stock Exchange on 3 April 2023 and trading is expected to commence on 4 April 2023.