5G Networks Limited (ASX: 5GN) is a company from the Telecommunication Services sector which provides network rollout and ICT services.
On 23 May 2019, 5G Networks announced that it has increased its available debt facility with Commonwealth Bank of Australia (CBA) to $7.2 million. With this increased facility, the company would have further capacity to go ahead, with any acquisition opportunity emerging in the future. With this increased facility, along with the recent capital raise of $8 million, the company would be able to execute its strategy, as well as expand in the current market confidently.
On 8 April 2019, the company had announced about the completion of $8 million placement by issuing 10,000,000 new fully paid ordinary shares to sophisticated and professional investors. Each of these shares was issued at A$0.80 per share for raising A$8 million before costs. The Bell Potter Securities Ltd was the lead Manager. These raised funds would provide a strong capital base to be used by the company, for further selected acquisitions as well as in advancing the east coast roll out of 5GN’s fibre network.
Further, the company would continue to explore, as well as pursue accretive acquisitions in Data centre facilities, Managed service providers as well as AWS partners and Software development companies.
Besides, the integration of the recently acquired Melbourne Data Centre (MDC) is now finalized. The company is now focusing on strengthening, as well as enabling the sales team who will be actively addressing the market demand across Adelaide, Melbourne and Sydney. Apart from these, the company has also boosted the capacity of the data centre in order to meet the increasing demand for digital services in Australia which is further enabled by its nationwide network of connected data centres.
In the company’s March 2019 quarter, the quarterly cash receipt increased by 8% to $15.4 million as compared to its previous quarter. The period witnessed a consistent positive quarterly operational cash flow of $995,000 which was more than 13% as compared to its previous December 2018 quarter, excluding the abnormal payments for staff leave entitlements and acquisition costs.
The net cash inflow through the operating activities for the quarter was A$0.629 million. The primary source of cash inflow was in the form of receipt from the customers. The company also made payment in the form of product manufacturing and operating costs, staff costs, advertising and marketing along with administration and corporate costs.
The company made payment to acquire property, plant and equipment. Thus, the net cash outflow through the investing activities was A$0.315 million.
The net cash inflow through the financing activities was A$0.005 million as the company generated cash through borrowing and made repayment of the borrowing.
By the end of the March 2019 quarter, 5G Networks Limited had net cash and cash equivalent of A$3.130 million. The total estimated cash outflows for the June 2019 quarter is A$14.037 million.
The 5GN stock has generated an excellent YTD return of 197.62%. At present, the shares of 5GN are trading at A$1.220 (AEST: 2:33 PM, 23 May 2019), down by 2.4% as compared to its previous closing price. 5GN has a market capitalization of A$79.38 million and approximately 63.5 million outstanding shares.
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