Philips Lighting jumps in first day of trading

Royal Philips successfully floated a 25% stake its lighting business in what market commentary described as a further step towards focusing on manufacturing goods for the health-care market.

Shares in Philips Lighting were priced at €20 each, slightly below the mid-point of the range of between €18.5 and €22.50 at which they were flogged, valuing its shareholders´ equity at €3bn.

The listing raised €750m in proceeds and would cut Royal Philips´s stake to 71.25% if the over-allotment options were fully excercised.

As of 14:32 BST shares in the company were gaining 8.58% and changing hands at €21.72 in Euronext Amsterdam trading.

Management said it was targetting an anual cash dividend payout equal to between 40% and 50% of its net income, with the first payment expected in 2017.

Philips Lighting reported net profits of €547m last year on €7.47bn in revenues.

However, the Company was facing a secular trend towards more expensive but lower-turnover LED lights and away from traditional lightning, with sales volumes expected to fall in coming years, according to a prospectus issued ahead of the float.

Significantly, several other Dutch outfits had announced their intention to list on the stockmarket in the near future following a slow start to the year.