LMS Compliance caps Catalist debut at S$0.27, 3.9% above IPO price
Uma Devi
TESTING and certification services provider LMS Compliance ended its trading debut on the Catalist board of the Singapore Exchange (SGX) on Thursday (Dec 1) at S$0.27, about 3.9 per cent or S$0.01 above its initial public offering (IPO) price of S$0.26 per share.
About 950,000 shares worth a collective S$250,000 were traded over the course of the day, SGX data showed.
The Malaysia-based company launched its IPO on Nov 22, and was looking to raise gross proceeds of S$3.64 million through the sale of 14 million shares. Based on the issue price, LMS Compliance will have a market capitalisation of S$22.7 million at listing and a price-to-earnings ratio of 12.4 times.
Net proceeds will amount to S$2.04 million and more than half these proceeds, or S$1.2 million, will be set aside for acquisitions, joint ventures and strategic alliances in countries such as Malaysia, Indonesia and China to grow the company’s business.
Some S$540,000 has been set aside for general working capital purposes, while the remaining S$300,000 is earmarked for the expansion of two of the company’s business segments: the certification services segment and the conformity assessment technology distribution segment.
On Nov 30, the company announced that all 14 million placement shares were fully subscribed as at the close of placement at 12 pm on Nov 29. It said that Nickle Luo – chief executive of RID Testing and Certification and VEO Standards – was one of the anchor investors that took part in the placement.
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LMS Compliance was founded in 2006, and provides testing and certification services to industries such as food, fertiliser, pharmaceuticals and medical devices, and healthcare.
Some of the services the group provides include environmental pollutant monitoring, microbiological testing and nutrition facts testing. Apart from laboratory testing services, the group has also diversified into providing certification services, and the trading of laboratory equipment and chemicals.
As at Sep 16, the company offers more than 1,100 accredited tests and 10,200 non-accredited tests.
When LMS started out, it offered databases that were manually updated by staff. This led to some human errors, noted LMS Compliance chief executive Louis Ooi in an interview with The Business Times. The company later added digital laboratory solutions, which improved standards as well as margins.
Ooi said that prior to digitalisation, LMS Compliance’s margin was less than 20 per cent. In comparison, the group’s net margin for the first quarter of 2022 stood at 32.5 per cent.
For FY2021, the group reported earnings of RM4.9 million (S$1.5 million) – up from a profit of RM4.7 million in FY2020. Revenue was up 7.6 per cent at RM17 million, from RM15.8 million. For Q1 this year, net profit rose to RM1.4 million from RM1.1 million in the year-ago period. Revenue was up 10.4 per cent at RM4.4 million.
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