PWR rockets on stock market

PWR Performance Products, a Gold Coast company serving many forms of motorsport globally as well as the high-performance road car industry and emerging technology projects, has made a lightning debut on the stock market.

PWR shares traded at almost twice the price at which they were issued in the recent initial public offering (IPO) when they came on the Australian Securities Exchange (ASX)  yesterday.

The Weel family retains control of the business, still holding 38.4 per cent of the company which last night was valued by the market at $290 million.

In the IPO 54.5 million shares were issued to investors at $1.50 apiece, raising $81.75 million. The stock first traded on the ASX at $2.52 but climbed as high as $2.95, with 9,721,312 shares changing hands during the day.

PWR designs and makes cooling systems (predominantly radiators and intercoolers) for teams in V8 Supercars, Formula 1, NASCAR, the World Rally Championship, IndyCar and Germany’s DTM touring car championship. It is also designing cooling systems for battery-powered electric vehicles.

It’s a high-margin business and PWR has enjoyed strong profit growth, with forecasts of more to come.

It has predicted that revenues that were $16.6 million in 2012-13 will rise to almost $47 million this financial year, with an after-tax profit of almost $10.5 million projected.

Sixty per cent of its sales are in Europe, 25 per cent in the US and most of the remaining 15 per cent in Australia.

F1’s switch from naturally-aspirated V8 engines to hybrid V6 power units last year has been a particular boon for PWR.

It supplied Red Bull Racing exclusively during its four world championship-winning years (2010-2013) but now has at least half the market in cooling F1 cars.

PWR (Paul Weel Radiators) is based at Ormeau in the Gold Coast hinterland and now has operations at Tamworth in Britain and, having acquired American company C&R this year, at Indianapolis and Mooresville near NASCAR ‘capital’ Charlotte in the US.

Kees Weel, the chief executive and managing director, won several Australasian Safaris and was the team principal of the PWR V8 Supercar team that raced from 1998 to 2007 and for which his son Paul Weel drove.

Paul Weel co-founded PWR Performance Products with his father and is the company’s production manager, while the chairman is Bob Thorn, who for nine years was managing director of the Super Retail Group that includes the Supercheap Auto stores.