BUILDING materials supplier NH Ceramics, the holding company of Nam Huat Tiling & Panelling Co Pte Ltd, yesterday launched its initial public offering of 13 million new shares priced at 29 cents each.

The offering comprises a public offer tranche of two million shares and a placement tranche of 11 million shares, which include 3.25 million shares reserved for employees of the group.

This IPO, which represents about 20 per cent of the company's enlarged share capital, is expected to raise about $2.7 million to be used as working capital.

The issue price of 29 cents represents a price-earnings ratio of 7.02 times based on the earnings for the financial year ended June 30, 1999.

NH Ceramics started out 37 years ago as a supplier of building materials for small-scale residential projects. It has since grown to become a key supplier of finishing and building materials such as ceramic tiles, pavers, mosaic murals and natural slates.

The ISO 9002-certified company is also one of the 10 suppliers of ceramic tiles pre- qualified by HDB, and was awarded an L6 rating in 1995 by the then Construction Industry Development Board (now Building and Construction Authority) which allows it to tender for public contracts of any amount.

Future plans include the expansion of its retail business when it moves to a bigger showroom by the middle of next year, as well as leveraging on the expected strong demand from public sector projects due to the various HDB and upgrading programmes.

The group posted a turnover of $33.2 million for the year ended June 30, 1999, up 22.4 per cent from the previous year. Net profit also rose in the same time period from $334,000 to $2.1 million in 1999.

Overseas Union Bank is the manager, lead underwriter and placement agent for the IPO. The invitation will close at 12 noon next Thursday and the shares will be traded in board lots of 1,000 shares each when listed.

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(Business Times)