Impelus’ Shares Surged by 20% On ASX Post Favourable Litigation Announcement

Impelus’ Shares Surged by 20% On ASX Post Favourable Litigation Announcement

Impelus Limited (ASX: IMS) announced that it had reached a settlement with the vendors, which is favourable to the company. It is now continuing to vigorously pursue related claims against the other associated parties.

The company announced about the proceeding in its 2018 annual statutory accounts (refer Post Balance Date events and Note 29) contained within the 2018 Annual Report and Market Update on November 30, 2018. It stated that it had commenced legal action in the Federal Court against the vendors (and associated parties) of C2B Solutions Pty Limited concerning the acquisition of that company by Impelus (IMS).

In the previous update, it announced the change in the interest of its substantial holder, where the voting power of Mr. Brendan Birthistle increased from 20.43% to 23%. Mr. Birthistle acquired 22,041,636 number of ordinary shares at $0.11 per share, taking the total holdings to 142,543,636 direct shares. Mr. Birthistle also holds an indirect interest in the company via Connaught Consultants (Finance) Pty Ltd with 810,000 Shares; Connaught Consultants (Finance) Pty Ltd (Super Fund Account) with 14,300,000 Shares; and Muintearas Pty Limited with 1,310,000 Shares. The issue of ordinary shares received approval by shareholders at the company’s AGM on February 22, 2019.

In its half-yearly result, the company reported a decrease in its revenue from ordinary activities by 60% to $6,117,374 in H1 FY19 from $15,460,270 in H1 FY18. Its UK business continued to show profitable performance in H1 FY19. Its AU business rebuild is progressing well, where it’s Premium Lead Generation (PLG) revenue component grew in seven months from zero in March 2018 to a $1.5 million annualized total revenue run rate based on October 2018 PLG revenue. As per the release in February 2019, the annualized AU PLG revenue run rate exceeded $3.0 million.

The company reported a loss from ordinary activities (EBITDA) at $368,944 in H1 FY19 from $2,164,502 in H2 FY18.

Impelus pinpointed more savings in H1 FY19, with the monthly cost base being progressively reduced by $153,000 per month. It is expected that the benefit will be apparent in the second half of the year. As per recent data, the bank debt at the end of February 2019 has reduced to $5.07 million from $7.97 million on December 31, 2019. The cash and cash equivalent of the company on December 31, 2018, stood at $1.12 million.

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The company aims to focus on key growth areas in the Digital Performance Marketing (DPM) business in both Australia and the UK in H2 FY19. With an expanding client base and growing product portfolio, it is expected that the top line of the company will improve.

At market close (on April 5, 2019), the stock of Impelus Limited was trading at $0.012, up 20% with a market capitalisation of ~$6.92 million. Today, it made day’s high at $0.012 and day’s low at $0.011 with a daily volume of 300,000. Its 52 weeks high was at $0.028 and 52 weeks low at $0.007 with an average volume of 741,310. Its absolute return for five years, one year and six months are -95.92%, -61.54%, and -37.50%, respectively.


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