It is not the most auspicious time for an IPO given the stock market shockwaves, so Escher Group Holdings Plc (ESCH) should probably be relieved that its share price did not plummet during its first day of trading. Opening at 170p, there was little trading during the day, but shares did trade at 165p.
The company, which provides outsourced point of sale software to the postal industry, listed on the AIM market of the London Stock Exchange today (Monday 8th August) with a capitalization of $47.1m. Escher’s sales pipeline is estimated at $157m over three years and as of 31 May 2011 it had contract revenues of $29m so its valuation is not outlandish.
Escher Group has a well defined but limited customer base - national postal authorities - that need to widen their service offerings and reduce costs in the wake of decreasing mail volumes. The outsourcing aspect has potential because of the direct effect its can have on costs.