Novatti Group Limited

Novatti Group Limited (ASX:NOV)

Offer Price

A$0.0400

per share

Offer Size

A$4,000,000

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Novatti Group Limited

Placement

Novatti Group Limited (ASX:NOV)

NOV

Lead Manager

Offer Price

A$0.0400

per share

Offer Size

A$4,000,000

Placement

Novatti Group Limited

Key Offer Details

Issue Price (Per Share)

A$0.0400

Discount

-42.86%

Offer Size

A$4,000,000

Shares Available

100,000,000

The Placement will be conducted in two tranches:

  • Placement Tranche 1: to issue 50,612,567 under listing rule 7.1 to raise ~A$2.0 million. Placement Tranche 1 will be eligible for the Entitlement Offer.

  • Placement Tranche 2: to raise up to an additional A$2.0 million, subject to shareholder approval. Existing major shareholder, Brayter Limited, has committed to ~A$0.7m under Tranche 2.

All Placement allocations will be split across Placement Tranche 1 and Placement Tranche 2, except for Brayter Limited who are committing under Placement Tranche 2.

The company intends to offer existing convertible note holders the ability to convert their note to equity on the same terms as the Placement, subject to shareholder approval.

Attaching Options:

For every 1 New Security subscribed for under the Offer, investors will receive 1 free attaching listed option (pending ASX approval) exercisable at A$0.064 and expiring on 31 December 2027 (“Attaching Option”). Attaching Options are subject to Novatti shareholder approval at the AGM.

Offer Price:

Offer price of A$0.04 per New Security (“Offer Price”).

The Offer Price represents a:

  • 31.6% discount to the Company’s last traded price of A$0.0585 on 8 October 2024;
  • 39.7% discount to the 5-day VWAP of A$0.0664 as at 8 October 2024; and
  • 49.0% discount to the 15-day VWAP of A$0.0785 as at 8 October 2024

Company Summary

Novatti is a leading digital payments fintech. It enables businesses to pay and be paid via total payment solutions, from any device, anywhere. It does this by leveraging its payments ecosystem, which includes technology and platforms, extensive regulatory licences, a global commercial partnerships. Its services capture the entire payments value chain. This includes issuing, such as prepaid and debit Visa cards, acquiring, enabling merchants to accept payment from financial institutions, and processing, including cross-border transfers and automated invoicing.

Investment Highlights

Core Focus on Payments AU/ NZ

Novatti's Payments AU/NZ segment is its key growth driver, achieving a 44% gross margin in FY24. The company’s strategic goal is to surpass 70% gross margins in FY27 by scaling its services, which include issuing, acquiring, and cross-border payments.

Operational Optimisation

Novatti has undertaken significant cost-saving measures, including the divestment of noncore segments like the International Bank of Australia (IBoA). The company has implemented A$7 million in annual savings so far and is targeting positive operating cash flow in January 2025.

Growth in Key Verticals

Novatti is expanding in high-margin sectors such as education, health, and real estate. Merchant acceptance customers increased by 21% in FY24, with a pipeline of 500+ new merchants for onboarding in FY25, supported by strong partnerships with software providers.

Upcoming Catalysts

To date: A$7 million in annualised cost reductions in place, with further reduction to be implemented in Q2 FY25

January 2025: Operating cash flow breakeven (as messaged by cash EBITDA)

H2 FY25: Positive operating cashflow

FY27: Targeting a 70% gross margin across core operations

Use of Funds

The funds raised will be focused towards:

  • Repayment of debt
  • Vertical market entry
  • Brand refresh
  • New business initiatives
  • General working capital

Indicative Timetable

The dates are indicative only and are subject to change without notice. The Company and the Lead Managers reserve the right to extend the Closing Date of the offer or close the capital raise early without notice. All times are in AEDT (Sydney, Australia) unless stated otherwise.

Placement & Sub-underwriting Offer opens

Wednesday October 09 2024

Placement & Sub-underwriting Offer closes

Thursday October 10 2024

Offer letters signed and accepted

5pm Thursday October 10 2024

NOV Recommences Trading

Friday October 11 2024

Placement Tranche 1 Settlement Date

Monday October 21 2024

Placement Tranche 1 Allotment Date

Tuesday October 22 2024

Entitlement Offer Opens (Estimate)

Late October 2024

Entitlement Offer Closes (Estimate)

Mid November 2024

Annual General Meeting

Late November 2024

Placement Tranche 2 Settlement Date

Early December 2024

Placement Tranche 2 Allotment Date

Early December 2024

Sub-underwriter Shortfall (Estimate)

Early December 2024

Sub-underwriter Funds Due (Estimate)

Early December 2024

Board & Management

Peter Pawlowitsch

Peter Pawlowitsch

Non-Executive Chair

Peter is an accountant by profession with extensive experience as a director and officer of ASX-listed entities. He brings more than 15 years of experience in operational management, business administration and project evaluation in the IT, hospitality and mining sectors.   Peter is also the Non-Executive Chairman of Family Zone Education (ASX:FZO) and a Non-Executive Director of Dubber Corporation (ASX: DUB), and VRX Silica (ASX: VRX).   Peter holds a Bachelor of Commerce from the University of Western Australia, is a current member of the Certified Practising Accountants of Australia, and holds a Masters of Business Administration from Curtin University.

Mark Healy

Mark Healy

Chief Executive Officer

Mark was appointed as CEO of Novatti in 2023 having played a key role in managing several major projects, including the continued investment in Novatti’s Acquiring business, growing the Issuing business in his previous role at Novatti as Executive General Manager of Payments. Prior to joining Novatti, Mark held key leadership roles in the payment industry, including as the Managing Director of Global Payments Australia, Chief Operating Officer at Ezidebit and eWAY and EVP and Chief Risk Officer for the Neovia Financial (now Paysafe) Group.

Mark is a graduate of the Royal Military College, Duntroon; holds a Bachelors of Science from Edith Cowan University and a Masters of Business Administration from the University of Western Australia.

Peter Samuel Cook

Peter Samuel Cook

Executive Director

Peter’s career has been largely based on founding and leading telecommunications and payments companies in Australia, Canada, Africa and Asia. This includes multiple exits to public-listed and private equity-backed companies in Australia and the US. Prior experience includes management and sales positions with Coopers & Lybrand (now PWC) and Telstra. Peter is a regular speaker and thought-leader on entrepreneurship, innovation, digital transformation and payments.      Peter is a graduate of the Royal Military College, Duntroon; has completed a BSc (UNSW), a Grad Dip Computing (Canberra) and the Graduate Diploma in Securities course from the Securities Institute of Australia. Peter is a Graduate Member of the Australian Institute of Company Directors.

Kenneth Lai

Kenneth Lai

Non-Executive Director

Kenneth is the managing director and owner of Prestige Team Limited, an investment company that, together with its subsidiaries, holds an investment portfolio in Hong Kong and Southeast Asia. Prestige Team Limited has interests in real estate, payment processing, digital marketing and information technology support services.   Kenneth has funded and invested in various Silicon Valley technology funds focusing on business opportunities within Asia. He also co-founded Legend World Development Technology Limited, a limited liability company incorporated in Hong Kong, which provides information technology solutions and integrated marketing solutions to business setups, and in which he is a shareholder and advisor.   Kenneth holds a Bachelor of Science degree majoring in Computer Science from the University of Auckland, New Zealand.

Killian Murphy

Killian Murphy

Non-Executive Director

Killian is a financial services professional with more than 15 years of experience working in capital markets across Ireland, UK, US and Australia.   He previously worked as Head of Industrials for Petra Capital as well as CIMB Australia and Davy (UK and Ireland). During this time, he has worked with a number of established and emerging tech and payments companies, assisting them in crafting their message for institutional investors and accessing growth capital.   Killian holds a Master of Arts (Economics) and a Bachelor of Arts (Hons) in Economics from University College Dublin, National University of Ireland.

Disclaimer

This site does not constitute an offer, recommendation or invitation to any person, nor does it purport to provide all of the information an interested party may require in order to investigate the affairs of Novatti Group Limited. This site is provided for information only and has not been prepared with the intention that the recipient should rely on it. Liquidity Technology Pty Ltd ("Liquidity") does not make any representation in relation to the contents of this site or give any assurances as to the accuracy or the degree of care or diligence used in preparing this document. The information, data and advice herein is provided to recipients on the clear understanding that Liquidity nor any of its representatives, directors, officers, employees, agents or advisers makes any representation or warranty about its accuracy, reliability, completeness or suitability for any particular purpose and does not accept liability (including, but not limited to, for any expenses, losses, damages and/or costs (including, but not limited to, indirect or consequential damage)) nor take any responsibility of any kind whatsoever (including, but not limited to, whether in contract, tort, financial or otherwise) for the information, data or advice contained in or for any omission or for any other information, statement or representation provided to any recipient (including, but not limited to, as a result of information, data or advice being inaccurate, unreliable, incomplete or unsuitable in any way and for any reason whatsoever). Users of this site must conduct their own investigation and analysis regarding any information, statement or representation contained or provided to any recipient or its associates by Liquidity or any of the Liquidity Personnel. Each recipient waives any right of action, which it has now or in the future against Liquidity or any of the Liquidity Personnel in respect of any errors or omissions on or from this site, however caused. All rights are reserved. If the whole or any part of a provision of this "Notice and Disclaimer" is invalid, illegal or unenforceable, then such provision will be severed and neither that part or provision or its severance will affect the validity or enforceability of the remaining parts or provisions.

Disclosure of Interest: Liquidity receives commission from dealing in securities and its introducers of business, may directly share in this commission. Liquidity and its associates may hold shares in Novatti Group Limited.

Novatti Group Limited

Placement

Novatti Group Limited (ASX:NOV)

NOV

Offer Price

A$0.0400

per share

Offer Size

A$4,000,000

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