Alpina Holdings' IPO aims to raise S$8.1m to grow its integrated facilities management offerings

SINGAPORE-based contractor Alpina Holdings is looking to raise S$8.1 million in an initial public offering (IPO) on the Catalist board, as it seeks to expand its service offerings in the integrated facilities management (IFM) segment.

Currently, the company provides integrated building services (IBS), mechanical and electrical (M&E) engineering services, and alteration and addition (A&A) works; 99 per cent of its projects between 2018 and the first half of 2021 were contracted by the Singapore government or a public university.

On Friday (Dec 21), Alpina launched its IPO, through which it plans to sell 37 million shares. This will comprise 32 million new ordinary shares and 5 million existing ordinary shares priced at S$0.31 per placement share - raising approximately S$8.1 million in net proceeds for the company and S$1.6 million for the company's controlling shareholders.

The controlling shareholders of the company are executive chairman and chief executive officer Low Siong Yong and executive director Tai Yoon On. The pair founded the company in 2003; Low holds 55 per cent, and Tai, 45 per cent of the issued share capital in the company.

Alpina said that it did not have a public tranche as part of its IPO after considering the prevailing market conditions and estimated demand through a book-building process.

The placement shares will represent approximately 20.1 per cent of the post-placement share capital of the company, and the company's market capitalisation at listing based on the placement price will be approximately S$57.1 million.

Alpina said that S$3 million of the net proceeds will go towards expanding their existing business in the IBS, M&E and A&A works segments.

Project director Louis Low told reporters on Thursday that the company has invested in machinery and training for its pool of over 400 technicians to improve their efficiency. For instance, the cleaning of kitchen exhaust ducting used to be a manual process requiring 6 workers to complete; with training and the deployment of a robot cleaner, the job now requires only half the manpower.

When clients call in with urgent issues, the company taps its GPS tracking system to assign technicians who are the closest by to the job, reducing downtime.

This drive to raise productivity has borne fruit, with the company's gross profit margin hovering between 22 and 29 per cent.

Said Tai: "Our technicians are generally very experienced and they spend less time on certain works than the industry. We are also able to take on more contracts without increasing our manpower because we make use of more technological solutions to improve productivity and profits."

CEO Low said the company is working with the Institute of Technical Education and Singapore Polytechnic by hiring graduates from these schools to fill the higher-skilled jobs in technology, thus lowering the company's reliance on foreign manpower; about 8 in 10 (81 per cent) of its current workforce is made up of foreign workers.

Alpina will dedicate another S$2.5 million in net proceeds to strengthening and accelerating the extension of its IFM services.

Project director Louis Low said the company has observed that IBS contracts are evolving into IFM works, which cover associated services such as cleaning and landscaping, on top of other building and M&E maintenance works. The company is eligible to tender for IFM projects of up to S$10 million from government and statutory bodies.

It said that it sees growth opportunities as government infrastructure spending continues to grow. The company also cited the Building and Construction Authority's estimates that the public sector is expected to contribute between S$14 billion and S$18 billion in demand a year from 2022 to 2025. This is up from S$13.2 billion in 2020, when the pandemic postponed project schedules and impacted resource management.

In anticipation of this, Alpina plans to explore the acquisition of companies that complement its existing service offerings, and so become a one-stop hub for IFM needs.

Such services could be labour-intensive, so there are plans to turn to more technological solutions to make such work more efficient. For example, pest control systems can now track pest movements.

The remaining S$2.591 million in net proceeds will go towards general working capital.

The company has not currently committed to a fixed dividend policy, although its directors intend to recommend and distribute at least half the company's net profits in FY2022 and FY2023.

The public offer closes on Jan 26 at noon. Trading is expected to commence at 9 am on Jan 28.

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