Dick Smith.

Going in the right direction: Dick Smith shares are up in early trade. Photo: Glenn Hunt

In its much anticipated stock market debut on Wednesday, Dick Smith was unable to generate the kind of fanfare that has surrounded new listings this year.

Shares in Dick Smith Holdings opened as high as 5.5 per cent above the initial public offering price of $2.20, but quickly fell as much as 1.8 per cent to $2.16. They finished the day flat at $2.20.

‘‘As managers of the business, our job is to deliver the business results that will be reflected in the share price and that is going to take sustained commitment,’’ said chief executive Nick Abboud. ‘‘We won’t be giving a running commentary on the daily share price. That is a judgment for the market to make and there are many more days’ trading ahead.’

In November last year, private equity firm Anchorage purchased Dick Smith, and its 325 store network, for $94 million from Woolworths.

At an IPO price of $2.20 per share, Dick Smith was valued at $520.3 million, a more than 400 per cent increase on just over a year ago.

Much of that increase will be based on investors' interpretation of the company's forecast $40 million net profit for this financial year.

''There has been significant transformation over the last 12 months. Significant cost cutting that was largely around store labour, marketing and also supply chain costs, and that's largely where the improvement in earnings has been derived from,'' said CIMB analyst Daniel Broeren.

In the last financial year, Dick Smith reported a profit of $6.7 million, but in the first quarter of this year, it has already reached $6.1 million.

However, sales growth is forecast to fall from $1.3 billion last financial year to $1.2 billion. With forecasts of net profit at $40 million and total net revenue of $1.2 billion, Dick Smith will be running an net profit after tax (NPAT) margin of 3.9 per cent this financial year

''There are questions around the perception of the [Dick Smith] brand, what it stands for in this market versus some of its competitors,'' said Mr Broeren.

''Clearly JB Hi-Fi is the leader on price, Good Guys, you could put them in the same category, they're both leaders on price. You couldn't say that Dick Smith leads on range either.''

However, based on store openings and further cost reductions Mr Broeren said he saw sales growth increasing 8 per cent in 2015.

The company's prospectus said that Dick Smith's directors intend to pay out approximately 60-70 per cent of net profit for the 2014 financial year.

The dividend would be paid in October next year.

66.2 per cent of Dick Smith was sold through the IPO, with Anchorage holding onto 47.3 million shares, or 20 per cent. Existing owners will hold on to the remaining share.

Consumer electronics have faced increasing pressure over the last few years, with a combination of deteriorating economic conditions and increased low budget competition driving down sales and profit margins at traditional retailers.

Dick Smith, in its prospectus said consumer sentiment has generally been increasing in 2013 and was up 23 per cent since its low point in August 2011.

''Management believes that this increased consumer sentiment has been driven by a more positive global and domestic economic outlook and historically low interest rates in Australia and New Zealand, and anticipates this will gradually impact retailers.''