Palo Retail, Castro’s subsidiary that operates the Urbanica chain of stores, today (Sunday) published a draft prospectus for an IPO on the Tel Aviv Stock Exchange, led by the underwriting company of the investment house Valio Base. This is after she submitted a first (not public) draft prospectus to the Securities Authority two months ago and an application for a permit to publish a public offering prospectus.
The Urbanica fashion and lifestyle chain was founded in 2015 and deals with retail sales and marketing in Israel of textiles, clothing and homewear and specializes in the latest fashion, as well as accessories and fashion products and other consumer products for leisure time. Currently, the company has 19 branches with a total area of approximately 34,000 square meters throughout the country, and it is expected to reach 50 branches by 2025 with an investment of approximately NIS 25 million.
According to the financial statements published by Castro for 2021, Palo Retail recorded a net profit of NIS 30.3 million last year, and distributed a NIS 30 million dividend to the Castro Group for this profit. The reports also show that Palo Retail is listed in Castro’s books at a value of NIS 161.2 million.
Urbanica forecasts for 2022 indicate continued rapid growth of about 23% in sales to about NIS 416 million and of about 42% in the adjusted net profit to about NIS 50 million. Urbanica also shows significant growth in Same store sales 21.7% in 2021 compared to 2019. In 2021, the company increased total sales by 51% and net profit by 150% compared to 2020.
The prospectus also states that Urbanika signed a cooperation agreement with Am Keshet for an investment of NIS 60 million in exchange for 4.99% of the company. The investment is made by providing a “media bank” worth NIS 60 million in accordance with the media price list for large players, which will be utilized in accordance with the strategy chosen by the company.
Urbanica adopts, in parallel with growth, a dividend distribution policy of at least 50% of net profit.
In the draft prospectus submitted today, the company estimated that sales in the first quarter of the year, which stood at NIS 72 million, were affected by the spread of the Omicron strain, which led to a significant decrease in visitors to shopping centers. Despite this, the Passover holiday that took place this year in April led to a significant increase in sales compared to sales in the first quarter.
It should also be noted that in April alone, sales in Palo’s identity stores increased by 21.1% compared to April 2019 and 10.2% compared to April 2021, an increase that “contributed to significant operating profit and net profit”.
Mariano Karp, who last week was approved as CEO of Urbanica, and who has so far served as CEO of Top Ten, will receive a monthly salary of NIS 77,000 gross and ancillary conditions that include 21 days of vacation, a 7.5% contribution to the study fund, sick pay and sick days. . The agreement is valid until August 5, 2024, and its employment can be terminated by mutual notice of three months. His continued employment after the said date will be conditional on the approval of the company’s competent bodies.