Stealth Global Holdings (ASX:SGI) Group Managing Director, Mike Arnold, talks about the company's multi-channel business model to enable smoother and faster sales and distribution.
Rachael Jones: Hello I’m Rachael Jones for the Finance News Network. Joining me today from Stealth Global Holdings (ASX:SGI) is Group Managing Director, Mike Arnold. Mike, welcome to FNN.
Mike Arnold: Thanks Rachael.
Rachael Jones: First up Mike, could you start by giving us an introduction to your company?
Mike Arnold: Stealth is an international distribution group. We supply safety industrial workplace and healthcare consumable products, to a wide range of business customers. We have operations in Australia, in Asia, Europe, as well as Africa. We serve multiple customers across a whole host of industry sectors. But traditionally, we look after resources construction engineering, general trade and manufacturing. We have 3,000 customers, 1500 suppliers that we source from 17 countries and we can offer our products to our customers, of about 500,000.
Rachael Jones: Before we get to your products and services. Can I just ask, how does your company differ from say someone like Amazon (NASDAQ:AMZN)?
Mike Arnold: Amazon is traditionally an online model and in our experience, trying to resolve a problem and talk to somebody in a call centre. But we have an integrated network of branches, call centres, sales representatives. We have an online platform, so we are a disruptor. But we also serve our customer by making sure that we’re close to their business, and helping them and support their business, as they move forward.
Rachael Jones: Let’s take a look at your business in more detail. Could you tell me more there about the platform?
Mike Arnold: We’re the only Australian company of our type operating across our four key markets. We offer an integrator one-stop shop service for supply and logistics. We work with international companies as far as Africa. We work with domestic companies in local markets of Australia and also in the UK. So the ability for a customer to have a one-stop shop for all their supply, and one invoice. Where presence across a global platform is our point of difference.
Rachael Jones: What can you tell me about your customers and your sectors?
Mike Arnold: Our sectors are very fragmented and the sectors that we serve are definitely wide stretched. The opportunity for us to expand our business, because it is so fragmented is opportunistic. We see that in different markets, different economies and different sectors are also all driven. So our diversity across our customer base and our sectors, gives us the ability to keep a repeat revenue base without the ups and downs, such as the resource cycle.
Rachael Jones: What can you tell me about your unique service offering?
Mike Arnold: The uniqueness is that our customers have choice of 500,000 products, across our global network. We have exclusive distribution rights with certain brands, that are Australian well-known leading brands, that we are taking into international markets. We also have our private label range, which at the moment it is involved in first aid products for the workplace. And we are looking to expand that quite significantly across our industrial and safety range, over the course of the next three or four years.
Rachael Jones: Now let’s talk about your IPO. How much are you looking to raise and where will the funds go?
Mike Arnold: We’re raising $12.5 million. $7.75 million is getting used for an acquisition of a company in Western Australia, called Heatley Safety and Industrial. It’s a 30-year trading business, fantastic people, fantastic business, about 2,500 customers and has a really good reputation in that market. The balance of working capital will be invested in stock, which we will be putting in our expansion plans, not only in Australia but offshore. And then we also have the ability to, as a cash generating business, be able to invest in other programs as we move forward.
Rachael Jones: Where can investors find out more information?
Mike Arnold: On our website, if you click on www.stealthgi.com the listing of our prospectus and all the information is there. We’re well supported by Hartleys as well as Argonaut broking firms, as joint lead managers. So apart from our website, those organisations can help.
Rachael Jones: Last question Mike. Why should investors consider investing in your IPO?
Mike Arnold: We think we are well valued at 4.9 times multiple, when we have looked at our peer groups of between seven or 8.5 times multiple. We are the only Australian company of our type across those four markets. And we are the only Australian company on the ASX that we know of, that is an industrial supplies organisation. We have enormous growth opportunity that we have forecast, moving forward. Not only in our IPO, but a pipeline of opportunities that sits thereafter. So we’re hoping to feed some good news stories, as the course of the next six and 12 months moves forward.
Rachael Jones: Mike Arnold, thanks for the introduction and best of luck with your IPO.
Mike Arnold: Thanks Rachael.