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GetSwift has brought in PwC to review its disclosure processes. Christopher Pearce
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by James Thomson
It seems someone at logistics software group GetSwift has remembered the old saying that the first step to solving a problem is recognising you have one.
On Tuesday the company effectively conceded that there are problems with it's continuos disclosure processes by appointing accounting firm PwC to review its compliance in that area.
"As part of that engagement, PwC will also assist the company in its preparation of a more comprehensive market update, which will address questions raised by ASX in its correspondence with the company as well as other commentary in the market," GetSwift said in a statement on Tuesday morning.
The company will release its quarterly revenue report on Wednesday, with this comprehensive market update to follow by the end of the week.
GetSwift shares, which last traded on January 19 at $2.90 – a far cry from the $4 price it raised $70 million of capital at last December – will remain suspended until the market update is released.
The timeline GetSwift has set for its next set of market announcements is pretty clever too, as it gives GetSwift time to massage message in the coming days before its shares trade again.
Its quarterly report should show strong revenue growth – notwithstanding the fact revenue at somewhere south of $2 million a year (based on current run rates) looks pretty puny compared to its market value of $550 million – which gives the company a chance to demonstrate that its growth story remains intact, outside of these disclosures problems.
No doubt bringing in PwC will cost GetSwift managing director Joel Macdonald and chairman Bane Hunter a pretty penny penny – a back of the envelope estimate from experts in the sector suggests the bill will start at $150,000 and head north from there.
But long term, it has to be seen as a sensible investment.
GetSwift has around $100 million in the bank after its capital raising spree in 2017, and the big name investors it has attracted – IFM, Regal Funds Management, Thorney Investments and United States-based giant Fidelity International – should expect top-notch advisers to safeguard their capital.
Still, this market update and response to the ASX queries looms as a huge test for GetSwift.
We know from their own filings that GetSwift have issues with disclosure. The best example is a deal with a fruit delivery business called The Fruit Box was announced to the market in January last year as an "exclusive three year contract" in January last year. But when the deal ended just two months alter, investors were not informed.
That's clearly not good enough. As painful as it might be, GetSwift needs to acknowledge it has issues, take its medicine from the market and work with PwC to find ways to get its disclosure back on track.
And if that means it will be more circumspect about spruiking every deal (or potential deal) as a major milestone, then so be it.