Following our warnings at BizPortal about the high value That Quick, which is managed by Aviram Ganot, is interested in obtaining an IPO, the online retailer is lowering its price and going to the IPO at a value of only NIS 300 million. The company will raise NIS 100 million in an IPO for institutional investors, and will stand at a value of NIS 400 million after the raising. In the initial assessment, Entropy claimed that the company’s value should be about NIS 520-570 million, even though the company made a loss. And do not get me wrong – Quick is a company worthy of the stock market, but not worth what they aimed for.
“An institution that orders goods on Quick according to Entropy’s valuation is either stupid or negligent,” BizPortal wrote as part of a critique of “buying” valuations to save the IPO. After we were warned about the inflated value that the shipping company was interested in receiving, and about the gaps between the optimistic presentation and reality – the company was forced to issue at a more realistic value.
Only a year and a half ago, the owners raised NIS 55 million, six months ago the company raised NIS 180 million. And the latest leap in public fundraising at a value of NIS 400-500 million seems like an exploitation of the hot IPO market to push the public for expensive, very expensive and not-so-fine goods.
Quick operates as an online retailer in Israel (e-commerce technology), which markets fast consumer products (FMCG – Fast Goods Consumer Moving) including dry and fresh food, fruits and vegetables, butcher shop, deli, bakery, toiletries and pharma products, cleaning products and more.
The activity is carried out through an Internet platform that allows the company to manage a complete supply chain, without the need to invest in assets or inventory, starting from the stage of assembling the product basket by the customer and collecting the payment; Collection and packaging of the products, through an operational system operated by the company or through the supermarket companies, operates a delivery and delivery system for the customer’s home.
The company did increase sales significantly, from NIS 26 million in 2019 to NIS 86.7 million in the first three quarters of 2020, which is an annual rate of NIS 115.7 million per year (a jump of 343% in revenue, although the growth is higher – Revenues in the fourth quarter amounted to NIS 40 million). But the bottom line is the company is suffering heavy losses. Moreover – the activity loses raw. In other words, when they sell you the basket for NIS 100, it costs them NIS 105.
After all the company is a second-rate broker. The retail sites of the retail chains make higher profits because they are also the supplier. Quick is “another hand” on the way to the consumer. This does not mean that she can not make a profit, but it does mean that she has to go to great lengths to make a profit. In the meantime, it seeks to finance the losses from the investing public.
In 2019, the company recorded a cumulative loss of NIS 16.5 million, in 2020 the company already recorded a loss of NIS 27.7 million for the first three quarters, ie an expected annual loss of NIS 37 million (a jump of 124% in the annual loss; in an optimistic scenario the loss will be 30 million or more).
Importantly, Quick’s losses are not surprisingAfter all, the company is in the infiltration phase and when it enters new places it is actually setting up an infrastructure of activity including couriers and there are set up expenses that affect profitability. So it is certainly possible to look at losses as an investment, that as the company grows these losses (“start-up losses”) will be relatively lower. And yet – in the raw line and the bottom line these are heavy losses.
The main stakeholders in the company are the main beverage company (Coca-Cola, approximately 19.65%), Super-Pharm (17.85%), and Union Group (importer of Toyota and the franchisee of the H&M chain in Israel – 17.85%), and OBI Partners with 16.29%. The company’s CEO is Aviram Ganot, and prior to its issuance, the company agreed with Eldad Fresher, former CEO of Mizrahi Tefahot Bank, that he would be appointed chairman.
According to the company’s data, it provides services to more than 270 localities throughout the country, through operations at 26 supply points from Ashkelon to the north, of which 17 points provide a self-collection service. The company delivers over 40,000 orders a month, and in the fourth quarter of 2020 it recorded revenues estimated at NIS 40 million
