G3 Group considers sharemarket listing

G3 Group chief executive Mark Brightwell. Photo / Jason Oxenham

A combination of business mail and document management firms is eyeing a potential sharemarket listing.

New Zealand Mail, Send, Pete's Post, Fastway Post and Universal Mail were legally amalgamated under the G3 Group banner last month, said chief executive Mark Brightwell. Document management brands Filecorp and Eureka complete the group.

Brightwell said the Auckland-based company was considering a listing on NZX's yet-to-launch NXT market, which is targeted at growth-focused firms in the $10 million to $100 million valuation range.

It would be a compliance listing, meaning no capital would be raised, said Brightwell, who previously spent 19 years in senior management and executive positions at NZX-listed Freightways. He said the float could take place this year.

Market heavyweight Rob Campbell has been appointed as G3's chairman and major shareholders Evan Christian, Jason Butler and Steve Phillips have joined its board as non-executive directors.

Brightwell said an NXT listing could provide a stepping-stone to an eventual NZX main board listing.

While the traditional mail industry is in sharp decline, he said it remained a vital communication channel for most businesses.

"It's declining, but these traditional industries - it's the same with the document management side - are very profitable if you run them correctly, with good management and innovation and if you stay close to the customers."

Pete's Post was one of a number of independent operators that emerged after the deregulation of the postal industry in 1998. National Mail raised $12.7 million through an initial public offering and NZX listing in 2000, but shut up shop in the same year after failing to attract enough customers.

Brightwell said G3 had healthy and growing margins: the businesses that formed G3 had combined revenue of more than $40 million in the year to March 31.

Earnings before interest, tax, depreciation and amortisation (ebitda) reached $3.5 million in the 12 months to March 31, 2014, according to the company's website.

Brightwell said G3 was growth-focused and looking to grab market share from incumbent players such state-owned NZ Post, which reported a 1.6 per cent decline in annual revenue to $1.7 billion last year. Its domestic letter volumes shrank by 7 per cent to 642 million and are forecast to drop below 500 million in the next three years.

Brightwell said G3 was targeting acquisitions, probably in Australia, of businesses engaged in "the technology of workflows".

"That's the aggregation of data and then the delivery of data through multi-channels," he said. "It might be physical mail, or targeted email. It might be web-based presentation of that data."

G3's Universal Mail brand operates in Britain and provides international postcard stamps that are sold at tourist sites. The stamps are tailor-made for each site, such as the London Eye.

Despite the rise of email and social media, Brightwell said postcards remained surprisingly popular, particularly with Chinese and German tourists.