The ASX’s newest entrant is off to a strong start

The Koala Company Ltd (ASX: KOA) has listed at a healthy premium to its initial public offer price in an auspicious start to its life as a publicly traded company.

The furniture company raised $20 million via the issue of new shares, while existing shareholders sold down $48.1 million worth of stock under the ASX listing.

Early share jump

The company’s shares were priced at $3.40, however in early trade were changing hands for $3.75, up 10.3%.

On listing, the top 20 shareholders, which include several institutions, hold 97.48% of the shares on issue.

Koala also issued an interim report on its listing debut, showing that it made a profit of $5.37 million for the first half, up from a loss of $2.28 million for the previous corresponding period.

The company said it had enjoyed a “strong and growing average selling price and improved margins during the period”.

Koala said in its initial public offer prospectus that it was founded in 2015 and experienced early success selling its Koala mattress, “quickly becoming a leading Australian mattress brand”.

The company launched in Japan in 2017, and in 2018, launched its first sofa product in Australia, with that range also subsequently expanding to Japan.

The prospectus says further:

In November 2023, Koala launched in the US market with a targeted expansion and disciplined investment, delivering significant early growth. In 2025, Koala expanded its international footprint further with the launch into the UK market.

Chair Michael Gordon said the company was well-placed for growth.

As a furniture company, Koala is exposed to the global furniture market, which benefits from tailwinds including the growth of e‑commerce, increased time spent at home due to the shift to remote work, a desire to maximise the utilisation of living spaces, a growing emphasis on convenience, premiumisation, and the demand for more sustainable products. The business has a significant opportunity before it to grow in Koala’s established markets, scale its presence in newer markets and enter into additional markets over time to grow the business. The global furniture market has shown relatively steady and consistent rates of moderate growth in Koala’s key categories. Koala’s ability to enter new markets and scale is driven by its capital‑light business model and in‑house innovation capabilities, which enables the team to promptly adapt to changing consumer needs and market trends.

Further growth tipped

Koala is forecasting FY26 revenue of $332 million and net profit of $12.3 million.

Koala’s prospectus said the company would be valued at $305.3 million on listing at the $3.40 offer price.

The post The ASX’s newest entrant is off to a strong start appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.