In 2018, there were 78 IPOs and a significant proportion of these were small cap companies: 87 percent were under a $300 million market cap upon listing. With so many IPOs taking place, it is impossible to be familiar with them all.
However, one small cap company that has been flying under the radar since listing in early 2018 is Carbonxt (ASX:CG1). This is despite having some well-known and highly-respected investors on its register.
Property tycoons John Beville and Laing Walker both hold significant positions as major shareholders, and the likes of Washington H Soul Pattinson have a spot in the top 20 shareholders.
Carbonxt produces and sells Powdered Activated Carbon (PAC) to energy utilities and industrial facilities which removes mercury, sulphur and other toxins from industrial flue gas emissions and waste water.
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Following its ASX debut, Carbonxt announced $6.4 million of revenue in FY18, which was 68% ahead of FY17, and went on to raise a further $6 million by way of an institutional placement and entitlement offer to fund an expansion of its manufacturing facilities.
The expansion of the facilities was required following higher than expected demand for its activated carbon (AC) pellet product, which it launched post-listing.
Commenting on this expansion, Managing Director Warren Murphy said: “There are strong tailwinds supporting the growth of the product, including Trump’s import tariffs on Chinese imported products – where many of our potential customer base are currently sourcing their supply.
“Furthermore, unlike many other activated carbon products on the market, our products do not use bromine, which can be highly corrosive to plant equipment.”
Carbonxt is now supplying its pellet product to a number of industrial companies and municipal water suppliers in the US, and is continuing to grow its revenue as its capacity to meet customer demand increases.
In its latest quarterly report for the December 2019 quarter, the company reported revenue of $8.8 million for the first half of FY19 – exceeding its prospectus guidance of $8.4 million. It also expect to be cash flow positive by the end of FY19.
This content is produced by Star Investing in commercial partnership with Carbonxt. This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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