Newly ASX-listed companies such as Douugh Ltd (ASX: DOU), Cosol Ltd (ASX: COS) and 4D Medical Ltd (ASX: 4DX) have hit the ground running to deliver triple digit returns for their investors whilst some initial public offerings (IPOs) just never took off. Here are two of the worst performing IPOs from 2020.
Youfoodz Holdings Ltd (ASX: YFZ)
According to Youfoodz, the company specialises in the production and distribution of high quality and affordable, ready-made meals and other convenience food products for residential, retail and corporate customers. The business operates three production facilities in Brisbane and has developed a scalable, proprietary in-house technology system to optimise production and supply-chain management across its centres. Its facilities produce more than 350,000 ready-made meals, 80,000 snacks and 25,000 drinks per week on average.
The Youfoodz IPO had an offer price of $1.50 per share but its shares sank more than 30% to $1.05 on their first day of listing, and closed at 96 cents on Monday this week. The company has had a bumpy growth journey, delivering $123.3 million, $156.6 million and $127.3 million in revenue between FY18 to FY20 respectively.
Across those three years, Youfoodz reported a net loss after tax of $17.1 million, $34.6 million and $6.2 million respectively. Youfoodz is forecasting FY21 net revenue of $149.9 or a 17.7% increase in FY20. To achieve this, the company is focused on executing five key growth initiatives which include:
- Capturing underlying market and category growth.
- Growing segment market share and average order value through new offerings.
- Improving customer retention with a subscription model and loyalty program.
- Driving manufacturing automation and other efficiencies from a new, purpose-built manufacturing facility.
- Selectively targeting new geographies.
Zebit Inc (ASX: ZBT)
Zebit is a United States-based e-commerce merchant that also provides a financing solution to its customers via an in-house and proprietary buy now, pay later solution. It currently offers over 90,000 products across more than 25 product categories such as electronics, appliances, home décor, furniture, and beauty.
There are approximately 119.8 million US adults who have a credit score that is below prime and subprime categories, or have a thin/stale credit record. Zebit defines these 119.8 million US adults as "financially underserved customers" because of the lack of cost-effective or mainstream credit options available to them. Zebit sees itself as one of the first e-commerce companies to address this large, underserved consumer base in the US with its in-house BNPL solution.
The company achieved a record Black Friday performance with $1.63 million in net sales on the day, or an increase of 29.9% compared to Black Friday 2019. It also delivered total net sales of $23.5 million for the first two months of Q4 2020 or an increase of 21.7% on the prior corresponding period. Despite the company's confidence in achieving its prospectus forecast, its shares closed at 98 cents yesterday, down nearly 35% from its offer price of $1.50.
