Uniti Wireless’ Shares Surged Over 17% Post $15 Mn Capital Raising Announcement

Today, on May 28, 2019, Uniti Wireless Limited (ASX: UWL) announced that it has successfully completed subscription for 15 million new Ordinary Fully Paid Shares at $1 per share, to raise capital up to $15 Mn.

The issue price is a 26% premium to the 30-day volume weighted average price (VWAP) and a 1% discount to the 10-day VWAP. Although the placement was set to raise a minimum of $10 million; in case of over-subscription, the company’s Board elected to raise an additional $5 million.

The placement recipients include institutional and private sophisticated investors; the majority being UWL shareholders. As per the regulatory compliances, UWL Board or management were not entitled to participate in the placement.

The placement materially bolsters UWL’s readily available cash reserves and is to be allocated explicitly towards an active program of accretive acquisitions of businesses, which fits within UWL’s stated “three pillars” growth strategy, encompassing wireless, fibre and speciality telecommunications services.

As evidence of commitment to its growth-by-acquisition agenda, UWL has announced three acquisitions since mid-April (Pivit, Fone Dynamics and Call Dynamics), which are collectively forecasted to deliver greater than 60% Earnings Per Share (“EPS*”) accretion to UWL shareholders in FY2020. The additional cash provided via this placement further strengthens UWL’s capability to execute on accretive acquisitions, from an expanding list of prospects.

The placement is scheduled to occur on June 5, 2019, or another date agreed in writing with the shareholders.

Graeme Barclay, UWL’s Chairman, stated that the management is excited to have successfully concluded this capital raising process, which will be helpful in fuelling UWL’s inorganic growth strategy. The support received from the shareholders has been outstanding, for which the Board and Executive Team are very grateful.

In a previous update, UWL announced its acquisition of Call Dynamics (100%) effective June 1, 2019. The complementary features between the two businesses (Fone Dynamics and Call Dynamics) will enable UWL to aggressively pursue customer growth from SOHO through to larger enterprises, with enhanced sales reach, product diversity, digital marketing smarts and scale efficiency.

H1 FY19 P&L Statement (Source: Company Reports)

In its H1 FY19 results, UWL reported an increase in revenues from continuing operations from $1.68 million in H1 FY18 to $3.06 million in H1 FY19. Its loss before tax increased from $2.11 million in H1 FY18 to $7.22 million in H1 FY19.

On the stock information front, at market close on May 28, 2019, the stock of Uniti Wireless was trading at $1.230, up 17.7% during the day’s trade with a market capitalisation of ~$136.92 million. Today, it reached day’s high at $1.50 and day’s low at $1.085, with a daily volume of 2,866,491. Its 52 weeks high price stands at $1.250 and 52 weeks low price at $0.170, with an average volume of 1,575,724 (yearly). Its absolute returns for the past three months and one month are 450% and 109%, respectively.


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