IPOs less to list than Australia

The cost of listing a company on the sharemarket is cheaper in New Zealand than Australia, a PricewaterhouseCoopers survey shows.

In its 2004 survey of initial public offerings, PwC said IPO costs as a percentage of funds raised averaged 5.5 per cent in New Zealand last year, whereas in Australia, the median cost was 7.8 per cent.

Costs of the 17 New Zealand IPOs last year ranged from 2.7 per cent to 8.8 per cent.

IPO costs typically include broker fees, legal and accounting fees, advertising and printing.

A total of $774 million was raised through IPOs in 2004, with the biggest being Feltex Carpet's $243 million and the smallest New Zealand Finance Holdings' $2.9 million.

About $133 million more was raised through IPOs in 2004 than the total funds raised over the previous four years.

Excluding Contact Energy's $1.1 billion IPO, 2004 saw the most money raised from share floats in the past 10 years.

PwC said $1.7 billion worth of capital returns to shareholders last year from companies such as NGC Holdings, Tenon and Carter Holt Harvey, had helped create an environment where investors were receptive to IPOs.

However, in comparison, A$7.2 billion was raised from almost 100 floats in Australia last year and US$42 billion through more than 200 IPOs in the United States.

Of last year's New Zealand floats, about 80 per cent of the proceeds were paid to vendors selling down their stakes or exiting companies.

Pumpkin Patch was 2004's best performing local IPO with its shares rising 121 per cent from the $1.25 offer price to $2.76 by December 31, 2004.