I see a few concerns....I am absolutely appalled that a company...

I see a few concerns....

I am absolutely appalled that a company of this standing needs to go to the market to raise funds of such a small magnitude in reality to the big picture. The purpose of the raising has been described as:

- Investment in, and expansion of, Veris Australia’s hi-tech digital laser scanning and Digital & Spatial survey equipment to cater for growth
opportunities arising from contracted and prospective pipeline of projects ($2.5m)
- Organic and acquisition opportunities to progress Veris Australia’s strategic expansion of its Digital & Data-as-a-Service model ($1.5m)
- Working capital to support Aqura’s contracted and pipeline of project works ($1.5m);
- Underpin the transition of Aqura’s earnings base to an “as a service model” via the commercialisation of Aqura’s internally developed
product suite ($0.8m) and
- Working capital to support general balance sheet strengthening and costs of the Offer ($1.1m)


For a survey firm, where it costs about $120k of capital (Vehicle, RTS, Software) to put a fee earner out on project site with a useful life of about 7 year, this is mere business as usual replacement of end of life equipment levels of expenditure. If they cannot fund this through business as usual channels they are in a hell load of trouble.

Secondly the assertion that they have $44m in 'secured' contracts seems a bit of a stretch. My understanding of contracts offered by the likes of their client list to 2nd tier supplier is they are able to be terminated for convenience of the principal and usually with 14 or 30 days notice.

Thirdly I wonder what smoke signals they are getting from CBA about the $6.5m debt facility due in September 2021 - that is only 6 months away.

Finally if they are capexing equipment and with the instant asset write off I wouldn't hold my breath for any franked dividends from Veris for a long time. They won't be paying any tax for a long time.

I suspect they will soldier on and produce poor results whilst Directors and Senior Management are the winners by keeping the beast alive.