Back burner: Rocket Lab delays US listing
Plan for launch on to US markets is pushed back into the third quarter of the year
Rocket Lab’s planned US stock exchange listing has been pushed back into the third quarter of this year. The Kiwi-American company, founded by Aucklander Peter Beck, announced plans in early March for a US$4.1 billion listing via a special purpose acquisition company (Spac or shell company) called Vector on the Nasdaq exchange.
At the time Beck said it was planning for the listing to go ahead during the second quarter of this year.
But a Rocket Lab spokeswoman this week confirmed that a US Securities and Exchange Commission filing by Vector had pushed out the timeline.
The filing states: “The Rocket Lab Business Combination is expected to close in the third quarter of 2021, subject to the satisfaction of certain customary closing conditions”.
The filing was made on May 24 — less than 10 days after Rocket Lab suffered its third mission failure.
On May 15 its rocket experienced an anomaly during its 20th Electron mission “Running Out Of Toes”, prompting a US Federal Aviation Administration investigation.
The rocket was carrying two Earthobservation satellites for BlackSky, an imaging company with civilian, intelligence community and defence customers.
It was Rocket Lab’s third failure in 20 launches of its Electron rocket. Its very first launch in 2017 — a test mission — was intentionally destroyed after a suspected problem with down-range tracking, which turned out not to be an issue.
In 2020 it lost a rocket to an electrical wiring fault, introduced during manufacture.
Delaying the listing to the third quarter will give Rocket Lab time to launch another rocket in what will hopefully be a more successful attempt, leaving a better impression in investors’ minds.
Going digital
Craigs Investment Partners’ announcement this week that it is hiring digital expert Simon Tong from
ASB is a sign that traditional brokers are seeing the benefits of going digital.
Online trading platforms Sharesies, Hatch and Stake have seen huge growth in the past year and others are keen to get a share of this action.
Craigs chairman Sir Ralph Norris made it clear this week that it has hired Tong to beef up its digital offering.
But he wouldn’t be drawn on whether Craigs plans to launch its own online trading platform, saying: “I can’t comment on our plans in that area but certainly the current offerings that we have are not contemporary. We need to be moving forward in that area.
“You will see announcements in that regard as we get closer to launching those, but that is a little way off at this point.”
No doubt Craigs will also be eyeing the success of Direct Broking for Jarden, which acquired that business from ANZ in 2017 for an undisclosed sum.
But latest financial accounts show Jarden is still paying for the purchase and will continue to pay the ANZ a share of the revenue from Direct Broking — now Jarden Direct — for the next eight years.
Jarden’s accounts for its 2020 financial year note that ANZ is entitled to a percentage of revenue earned by the company for both
acquired and future retail clients through the Jarden Direct Platform.
“The contingent consideration is payable by the company for a period of up to 10 years following the acquisition (eight years remaining).” In 2020 Jarden paid $1.7 million in contingent consideration to ANZ, up from $900,000 in 2019.
At the end of 2020 it had a liability for $10.1m, made up of $9m noncurrent and $1.1m current based on the discounted value of expected future cash outflows, using an assumed discount rate of 7.7 per cent and revenue growth of 3 per cent.
Bumper year
Jarden’s accounts also show that it had a bumper year for profits in 2020. It made $22.055m in the year to December 31, up from $7.444m in 2019.
Its fees and commissions rose from $103m to $137.7m, driven largely by a rise in brokerage and foreign exchange fees, which were up from $60.2m to $82.6m.
Investment banking fees also rose from $4.9m to $11.3m while asset and portfolio management fees rose from $34.3m to $41.8m. However the company’s operating expenses also rose, from $103.7m to $124.6m.
It did not approve or pay any dividends in 2020.
Jarden’s profit far outpaced that of
rival Goldman Sachs NZ, which made $13.67m in the year to December 31 — more than double the $5.18m it made in 2019.
But it still fell well short of Craigs Investment Partners’ holding company CIP Holdings, which made $65.4m in its 2020 financial year, up from the $12.93m it made in 2019 when it owned only 50.1 per cent of the company.
Oriens raises $80m
Oriens Capital has raised $80m for its second fund and is looking for a further $20m in oversubscriptions.
The Tauranga-based private equity firm plans to invest the money in six to nine private New Zealand businesses valued at between $10m and $50m each.
Peter Tinholt, partner at Oriens Capital, said it targeted high quality businesses with strong domestic market positions and an often untapped export opportunity.
“We offer capital, networks and expertise, and partner with business founders and owners in both expansion capital and succession capital transactions to help these companies achieve their potential.” Oriens raised $50.6m in its first fund and invested it in six companies including miniature apple growing business Rockit Global, agri-tech business Bluelab and Rhino Manufacturing. This year it sold out of its investment in About Health Supplements, selling it to NZX-listed Just Life Group.
Gentrack down
Gentrack and Pushpay have both seen their shares trade lower in the last few days after holding investorfocused events.
Harbour Asset Management portfolio manager Shane Solly says both may be a case of “not enough” in terms of giving modest guidance for future growth relative to what is already baked into their share prices.
“Or it may just reflect that both businesses are higher growth tech businesses that are going through transitional periods due to the impact of Covid-19 — Gentrack having to reset its business after a slowdown in business and Pushpay as a relative beneficiary of donors being forced to move to its system that faces question marks around whether donor behaviour will change as economies re-open for in-person activity.”
Alternatively, said Solly, the share price responses may just reflect a broader New Zealand sharemarket that is relatively fully priced.
Jarden downgraded Gentrack’s target price from $1.92 to $1.82 after the investor day, citing earnings changes.
Analysts Wassim Kisirwani, Wilson Wong and Matt Johnston said in a note that Gentrack’s investor day had reaffirmed the company’s dominant incumbent position across its key markets as well as outlining examples of where the business was making improvements.
“However, given the revenue losses which were not previously quantified, it remains difficult for us to gain confidence in the company’s ability to stem losses and add new customers, and to manage the significant transformation underway.
“The stock is inexpensive in our view, however, we see a lack of nearterm catalysts and await some evidence of traction with the transformation programme, revenue stabilisation and clearer pathway to earnings growth.”