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Child care firm in $10m share offer [AU]

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Brannelly, Louise
Publication Date: 
18 Mar 2004

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The directors of Queensland-based Hutchison's Child Care Services Ltd are so confident their upcoming float will close fully subscribed they have decided against having the $10 million offer underwritten.

Hutchison yesterday launched its prospectus offering up to 10 million shares at $1 each.

This will give the company a market capitalisation of $60 million when it joins the increasingly crowded ranks of childcare companies listed on the Australian Stock Exchange next month.

ABC Learning Centres, which sets the benchmark against which rivals are measured, is capitalised at $460 million.

The Hutchison float also faces stiff competition for the hearts and wallets of investors as two of the biggest offers this year &em; Pacific Brands and zinc miner Zinifex (the former Pasminco) &em; are trying to raise up to $2.7 billion before they also hit the boards next month.

But the Hutchison board believes strong investor interest in the childcare sector, the company's established brand and the pricing of its offer will enable it to get the float away.

Chief executive Craig Napier said strong institutional support was expected despite only $2 million being allocated for institutional investors.

Hutchison, established in 1992, operates 61 childcare centres in Queensland, NSW, Victoria and South Australia. It plans to have 82 by the end of December.

It generated sales of $14.05 million in the December half of 2003 and this is forecast to grow to $24.05 million in the December half of this year.

The prospectus identifies risk factors for the stock, including competition in the child care sector which it says "is significant and may increase".

Another risk is share liquidity.

- reprinted from The Courier-Mail