Novatti announce capital raising initiative to raise up to $9.4 million
ASX-listed Novatti Group Limited, a leading fintech enabling businesses to pay and be paid, have announced a capital raising initiative to raise up to $9.4 million.
The raising has received strong support from professional and institutional investors, with binding commitments received for approximately $4 million under the Placement and approximately $3 million in a partial underwriting of the Entitlement Offer. Major shareholder, Brayter Limited, has committed to subscribe for $920,000 and Directors Peter Pawlowitsch and Peter Cook have committed to subscribe for an aggregate $380,000 under the Entitlement Offer and sub-underwrite in aggregate $520,000.
Commenting on the Capital Raising, Novatti CEO, Mark Healy, said, “Since the start of FY24, the Novatti leadership team has been focussed on the successful implementation of its turnaround strategy that is simplifying the business, narrowing its focus and ultimately increasing group financial performance. This work has already delivered tangible results, with more than $7 million in annualised cost savings implemented, with further savings to be implemented in Q2 FY25, the sale of non-core assets, the streamlining of existing business, and the exit from complex or unprofitable services.
“Indicative of the positive financial impact flowing from these initiatives, between FY22 and FY24, revenue within Novatti’s core Payments Australian / New Zealand business has increased 173% customers have jumped by 76%, and gross transaction value has surged by 143%. In FY24 alone we saw a 20% reduction in operating expenses (excluding International Bank of Australia) and in Q4 FY24 cash usage fell 54% year-on-year.
“With the boost to Novatti’s financial performance from these initiatives continuing to flow through, we remain committed to our targets of monthly positive operating cashflow by January 2025, and an overall positive operating cashflow in the half year ending June 2025.
“As we move closer to achieving these targets, the Capital Raising will help Novatti fund initiatives that unlock key catalysts for growth. On the back of the work already undertaken to turnaround and simplify the business, this growth will increasingly be unlocked within Novatti’s existing core Australia and New Zealand payments business. For example, we have already delivered a 700-basis point increase in gross margins in the core business across FY24 to 44%, with an FY27 target of 70%+ gross margins. This capital raising will help us to achieve this target via the delivery of new business initiatives, including improved customer targeting, brand awareness, and an overall focus on selling higher yielding product mixes,” Healy ended.
Proceeds from Novatti‘s Capital Raising will be allocated to:
- vertical market penetration (education, real estate and health)
- brand refresh
- repayment of liabilities
- new business initiatives
- general working capital
