Yellow Brick Road Holdings (ASX:YBR) Ltd, the home loan company founded by Australian entrepreneur Mark Bouris, is preparing to delist from the ASX after more than 15 years on the public market.
Before trading was suspended last Thursday, the company’s shares plummeted 3.3% to 5.8 cents. A statement to the ASX cited the reason for the trading halt was "pending an announcement by YBR in relation to an application to be removed from the official list of ASX”. After resuming trade this morning, shares are trading another 12% lower at 5.1 cents.
The company explained that the decision to delist was based on low trading volumes and liquidity, leaving shareholders with limited opportunities to exit their positions and for new investors to gain stock. It also cited the ability to save $350,000 in costs per annum.
Yellow Brick Road made its ASX debut in January 2008 with its shares priced at $1.105 — markedly higher than its current value. One Investment Group and Pink Platypus Pty Ltd are among its largest shareholders, holding 19% and 15% stakes respectively, according to Bloomberg data.
However the company faced challenges in recent years, including selling its wealth management arm to Sequoia Financial Group in 2019 to focus exclusively on the home loan sector.
Yellow Brick Road reported that its earnings before tax, depreciation and amortisation halved to $1.2 million in the 2023 fiscal year due to fierce competition and a high rate of loan refinancing.
Mark Bouris, previously known for his role in reality TV show The Apprentice Australia, has been under considerable pressure to improve the performance of the company, which last month aimed to transform into a digital entity amid declining loan demand and rising interest rates.
Yellow Brick Road says that its share price has been materially lower than the underlying value of its net tangible assets (NTA) for several years. The depressed share price means that raising capital would be highly dilutive to shareholders but management said that the company valuation after delisting would instead be based on its business and asset fundamentals and prospects.
The company says it will undertake a minimum holding share buy-back of ordinary shares for portfolios valued at less than $500. After delisting, shareholders will only be able to sell their stakes via off-market private transactions.
Shareholders will be asked to approve the delisting at a general meeting on or around October 24.