Article from NBR:Plexure completes $32m placement
CEO hints at new enterprise customer sign-up in January.Plexure chief executive officer Craig HerbisonPlexure has successfully closed an oversubscribed bookbuild for its $32 million underwritten placement and aims to list its shares on the ASX on November 25.
A $5m non-underwritten share purchase plan announced alongside the placement will kick off today and close the day before the listing.
Chief executive Craig Herbison said he was confident Plexure, a marketing specialist with technology designed for quick service restaurants and retailers, would have a new enterprise customer sign-up to announce in the new year.
The placement is conditional on the success of Plexure’s application for an ASX foreign exempt listing.
Herbison said he was confident the listing would go off without a hitch and the oversubscribed placement suggested it would be a strong launch.
“We are still awaiting ASX approval on one part of it, but there’s no significant barriers that we have seen at this point.”
Plexure had previously planned to raise up to $54m from a public share offer in Australia. Herbison said the additional capital had been intended for mergers and acquisitions but these had not progressed to a point where the cash was needed, which was why the current placement and share purchase plan totalled only $37m.
“Should that happen in the future, we will go back to the market to fund those.”
With the additional capital and associated works planned, Herbison forecast Plexure would remain cashflow negative for the next two financial years, after which it would return to profitability.
The company has turned only one profit since it was founded 10 years ago. The company posted a net profit of $1m in the year to March 31, before following up with a loss for the half to September 30 of $4.4m.
New customer
Herbison said the company was currently in the request-for-proposal stage with another large client overseas.He declined to get into specifics, but said the client was in the company’s existing target markets of grocery and quick-service restaurants and was not New Zealand based.
“There are competitors in there but we are feeling confident.”
The placement and share purchase plan are priced at $1.20 a share.
After a trading halt was lifted this morning the stock was down 16c or 10% to $1.39 by lunchtime.
Most of the money raised in the share offers will go on people, including sales staff, product developers and engineers.
“We need more sales people to talk to markets that are at distance from us.”
Boots on the ground
Herbison said roughly $10.7m would go on customer expansion, which meant more sales staff and project and account managers.Herbison said feedback from large enterprise customers had been that Plexure needed more staff on the ground to deal with issues without the hassles of dealing with different time zones.
If US growth continues as forecast, the company may open a corporate office.
About $4.9m would support innovation, such as enhancements of artificial intelligence capabilities to better target advertising and basket analysis.
There was $7.3m earmarked for expansion into new vertices and geographies, and $2m would go into scaling and increasing productivity.
Roughly $8.8m would be held back as working capital.
The company's placement presentation also stated $3m would go to paying off costs associated with the offer, and $2.1m would go to staffing to support scaling and productivity.
The closed pool of talent created by Covid-19 border closures continued to plague recruitment, Herbison said.
Commenting on the capital raise, Plexure chair Phil Norman said he was delighted the company had been able to close the placement quickly and that it had received strong support from Australian and New Zealand institutional, sophisticated and professional investors.
Allotment of new shares under the share purchase plan will occur on November 27.
