Best & Less (ASX:BST) share price jumps 7% after IPO

The retailer is enjoying a positive first day on the ASX.

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The Best & Less Group Holdings Ltd (ASX: BST) share price has entered the secondary market well into the green as it commenced trading after its initial public offering (IPO).

Best & Less shares are now exchanging hands at $2.32 apiece, a 6.89% jump on the float price of $2.16.

Let's explore how it has unfolded for Best & Less so far.

Quick recap on Best & Less

Best & Less Group, made up of the brands Best & Less in Australia and Postie in New Zealand, is a retailer specialising in baby and kids' apparel.

The company generates 86% of revenue from its proprietary brands, all designed in house. Its clothing is then distributed for sale across 246 physical stores and online.

The group recorded unaudited sales revenue of $663 million for FY21, beating the prospectus forecast of $658 million.

Best & Less IPO

Best & Less listed on the ASX today after a "successful public offering" in which the company raised $60 million on a valuation of $2.16 per share.

At this price, its market capitalisation was $271 million. Demand for its shares was "well supported by institutional and retail investors", according to the company.

Best & Less shares jumped to an intraday high of $2.31 after entering the secondary market.

For context, the S&P/ASX 200 Index (ASX: XJO) has posted a return of 0.07% today.

Regarding guidance, Best & Less sees "FY21 pro forma [earnings before interest, tax, depreciation and amortisation] EBITDA to exceed the pcp [prior corresponding period] by over 100% and to outperform the prospectus forecast…by approximately 15%".

The company also finished FY21 with a cash position of ~$27 million, approximately 18% ahead of forecasts.

Speaking on the listing, Best & Less chief executive Rodney Orrock said:

Today marks another milestone in the history of Best & Less Group, which has served generations of families across Australia and New Zealand.

Foolish takeaway

The Best & Less share price jumped more than 7% after entering the secondary market today. Best & Less shares trade under the ticker "BST".

The company has a market capitalisation of $282 million at the time of writing.

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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