You’ve made a valid observation regarding the D/E ratio. In my personal view, the urgency to raise funds likely stems from the D/E ratio. Despite a robust sales growth of approximately 40%, it’s noteworthy that debtor days have decreased. This suggests that there wasn’t an artificial inflation of sales figures leading up to the IPO. Given the impressive capital efficiency with a RoCE exceeding 25%, it’s reasonable to suspect a high D/E ratio, although this is purely speculative without concrete evidence.
In an ideal scenario, the advisor could have recommended securing Private equity funding to reduce the D/E ratio and consider going public after a 5-year period. This approach, in my opinion, could have helped mitigate the general skepticism often associated with SME IPOs.
As for establishing a competitive advantage, it’s likely that this will develop over time. Building a strong distribution network and establishing a recognizable brand presence are key steps in achieving this.
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