The numbers catch
Thursday, September 6, 2012/
There’s less than a week until SmartCompany’s night of nights and I can tell you that the team is getting pretty excited. The Smart50 Awards is our biggest event of the year and we are busy profiling 50 great companies that you are just going to love.
The other fun thing about the Smart50 is picking out the trends from the list. I don’t want to give too much away today, but there are quite a few companies thinking very big and working towards potential sharemarket floats or bringing investors on board.
It’s not just current Smart50 members thinking big – today news has emerged that one of the most famous Smart50 alumni, online retail pioneer Catch of the Day Group, is working steadily towards a float in the next 12 months to two years.
It’s exciting news. The listing of a Catch of the Day or a Deals Direct would give Australia its first purely online listed retailer and put another stamp of maturity on the sector.
But the news is not all that surprising. Catch of the Day raised $80 million by selling a 40% stake in the business to a consortium of investors that included James Packer, Seek founder Andrew Bassat and iconic tech hedge fund Tiger Global.
What’s really interesting about COTD’s march towards a potential listing is the work the company is putting in now to make it possible. It’s a great lesson to any SME that is aiming as high as a sharemarket float, or even just wants to get a loan from a bank next year.
After running the business themselves for many years, the company’s founders Gabby and Hezi Leibovich appointed former JB Hi-Fi executive Paul Reining as chief executive last November and they have clearly given him the mandate of getting the business IPO-ready.
“What we’ve been trying to do is put some financial rigour and governance processes in place to make sure we’re able to consider our next move in the next 12 to 24 months,” Reining told The Australian Financial Review.
“By June next year we will have three years of audited accounts to show a track record of sales and earnings growth.”
Any entrepreneur who has grown fast will tell you that systems and processes are crucial if that growth is to be sustainable. Yes, those systems are extremely difficult to get in place when a business is racing ahead, but the hard work needs to be done.
That means systems and processes in operations, in admin and perhaps most importantly, in financial reporting. Not every business will need to produce audited accounts like Catch of the Day does, but having numbers that are robust enough to stand up to the scrutiny of investors and bankers is a non-negotiable.