Debach is working to issue Delta Israel at a value of NIS 700 million


Isaac Debach also wants to participate in the IPO celebration. Calcalist has learned that Delta Galil, the textile company under its control (48.7%), is conducting a procedure to issue its Israeli operations, Delta Israel, on the Tel Aviv Stock Exchange at a value of NIS 700-600 million. Draft prospectus The first has already been submitted to the Securities Authority.

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The requested value is significantly higher than that in which Delta Israel is listed in Delta books, $ 30 million (approximately NIS 103 million). However, this is a historical value, which has not been updated for a long time.

Like many other companies, Delta has been hit by the corona crisis. Despite a 35% increase in the share in the last three months, since the beginning of the year the share has fallen by 44% and today the company is traded on the Tel Aviv and Nasdaq exchanges with a market value of NIS 1.33 billion – 40% lower than the peak value reached in the first half of 2019.

The drop in value occurred against the backdrop of Delta’s financial results in the first half of the year, during which it recorded a loss of $ 83 million. In the second quarter, revenues fell by 28% to $ 271 million. The main reason for the drop in results is the corona crisis, which led to the closure of the company’s chain of stores during the closure.

A 163% increase in online sales in the second quarter made up for some of the decline. The company estimates that in the second quarter the crisis deducted $ 147 million from sales and $ 37 million from operating profit. The first quarter was slightly better, with revenues down only 9% to $ 333 million.

Due to the corona, the company expelled workers to the IDF and managed to reduce the rent it pays. Delta also stated that it worked to reduce its expenses in all areas of activity, including reducing the company’s headquarters in Israel and its subsidiaries, reducing wages by 20% -10%. Violation of social rights), 20% for managers and 50% for the CEO and controlling shareholder Debah in April-December.

Isaac Debach Photo: Amit Shaal

Delta Israel is one of Delta’s five operating segments. It is engaged in the development, design and marketing of branded lingerie products for women and men, sleepwear, socks, Activewear clothing, as well as clothing products for children mainly under the Delta, Pix and Puma brands, which are distributed in the company’s stores in Israel, through its websites and wholesale activities In Israel, like Hamashbir Latzarchan, H&O, Super-Pharm and private chains.

The impact on Delta Israel’s results was significantly lower than the impact on the overall results. Delta Israel’s revenues in the second quarter and in the first half of the year decreased by 6% in both periods, and amounted to NIS 154.7 million and NIS 307 million, respectively. This compares with revenues of NIS 164.8 million in the second quarter of 2019 and NIS 327 million in the first half of that year. In the first half of the year, Delta Israel was responsible for approximately 12.2% of Delta’s total revenues. This is the sector responsible for the smallest share of Delta revenue. The most dominant sector is Delta USA, which accounts for 30% of revenues, as of the first half of the year.

Delta Israel’s profit was about NIS 30 million in the first half of the year, 2.6 times the profit in the corresponding period, when it was NIS 11.6 million. The main reason for this is the online activity, in which sales jumped 4-10 times in March and April (the months when the stores were closed), and in July rose by about 80%.

The profit in the first half of the year reflects an annual profit of NIS 60 million, which results in a desired multiplier in an issue of 11.5-10. In May, June and July this year, sales in Delta Israel stores increased compared to the corresponding months, due to high demand with the closure lifted.

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