- Several companies are embracing COVID-19 and unveiling their strategic and growth plans while boosting the confidence of investors.
- Companies like SUL and BET are raising capital to fulfil their growth initiatives.
- SUL has completed an Institutional Entitlement Offer worth AU$158 million and is all set to begin its Retail Entitlement Offer on 22 June 2020; the proceeds will be utilised in enabling the continued execution of SUL’s strategy and pursuit of strategic growth initiatives.
- BET has unveiled its Placement plans worth AU$35 million to capitalise growth initiatives, including expansion into the US market.
There are always two sides of a coin, right!
In the current circumstances, one side of the coin represents negative impact of COVID-19, demonstrated through fall in stock prices due to interruption in economic activity, while battling the virus. However, the other side of the coin represents embracing the opportunities by various companies in the light of COVID-19, which in turn are boosting their earnings and share prices.
The pandemic has triggered the opportunity in numerous areas such as e-commerce, digital payments, and artificial intelligence.
Several companies are unveiling their respective growth plans, along with capital raising. The combination of robust performance and expansion plans are reassuring and boosting the confidence of investors.
Super Retail Group Limited (ASX:SUL), an Australia based retailer announced the successful completion of the Institutional Entitlement Offer on 16 June 2020. The proceeds would be utilised in execution of SUL’s strategy and growth-related activities.
SUL completed Institutional Entitlement Offer worth AU$158 million
On 16 June 2020, SUL announced the completion of ~AU$158 million institutional component (Institutional Entitlement Offer) at an offer price of AU$7.19 per share. The institutional shareholders firmly supported the raise with the take-up of ~95% by the eligible institutional shareholders, including Mr Reg Rowe, founder, and major shareholder of SUL.
Under the institutional component, ~22 million new shares are expected to begin the allotment from 25 June 2020 followed by the commencement of trading on ASX (normal settlement basis) on the same day.
Source: ASX Announcement
The Retail Entitlement Offer which is expected to raise ~45 million will open on 22 June 2020 and close at 5:00 PM on 3 July 2020. Shareholders across Australia and New Zealand are eligible for participation in the Retail Entitlement Offer.
A day before, on 15 June 2020, SUL had disclosed an AU$203 million Institutional and Retail Entitlement Offer at an issue price of AU$7.19 per share, 1 for 7 non-renounceable entitlement offer (accelerated pro rata).
SUL also unveiled its robust trading update, highlighting its COVID-19 proof performance, backed by its omni-channel business strategy which is as follows-
- Following a decline in April (-26.2%), SUL’s sales rebounded strongly in May, driven by the Supercheap Auto, Rebel and BCF brands.
- Also, during April and May, there was a substantial shift to online sales with SUL’s online sales, surging up by 126.2 per cent as compared to pcp, representing 18.2 per cent of SUL group sales over the same period.
Source: Company’s Announcement
SUL last traded at AU$ 8.58 on 16 June 2020, with an increase of 9.859 per cent from its previous close.
BetMakers Technology Group Limited (ASX:BET)
An Australian company, BET is into developing and providing data and analytic goods for business to business wagering space, along with creation and supply of racing content.
BET’s AU$35 million Placement to capitalise growth initiatives, including expansion into the US market.
BET announced on 16 June 2020 that it has received firm commitments to raise AU$35 million, before costs, by way of a Placement from sophisticated and institutional investors at a price of AU$0.37 per new fully paid ordinary share. The Placement price represents an 8.6 per cent decrease to BET’s last closing price of AU$0.405, as on 12 June 2020.
BET’s Placement has strong investor demand from both domestic and international institutions.
The settlement and allotment of the shares are expected to be completed on 22 June 2020. Furthermore, the proceeds from the Placement will provide capital, enabling BET to pursue and execute growth initiatives.
Canaccord Genuity (Australia) Limited was noted as the Lead Manager and Bookrunner for the Placement.
BET has a robust balance sheet with cash and cash equivalents at AU$2.3 million, as on 31 March 2020.
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With consistent solid performance, BET reaffirmed its FY’20 guidance for positive EBITDA and revenue of ~AU$9 million. Further, BET expects to end its FY’20 with an annual revenue run rate of ~AU$12 million, along with the prospect for substantial growth in top line across FY’21 period.
BET settled the market session at AU$0.465 on 16 June 2020, surging up by 14.815 per cent from its previous close.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
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