Novatti Group (ASX:NOV) capital raising announcement

Novatti Group Limited (ASX:NOV) has announced a proposed capital raising initiative to raise up to $9.4 million. The capital raising, comprised of a placement to sophisticated and professional investors to raise $4 million and a non-renounceable pro rata entitlement offer on a 1-for-3 basis to raise up to $5.4 million, has received strong support from professional and institutional investors, with binding commitments received for approximately $4 million under the Placement and approximately $3 million in a partial underwriting of the Entitlement Offer.

Novatti CEO, Mark Healy, on the capital raising initiative

Since the start of FY24, the Novatti leadership team has been focused on the successful implementation of its turnaround strategy that is simplifying the business, narrowing its focus and ultimately increasing group financial performance. This work has already delivered tangible results, with more than $7 million in annualized cost savings implemented, with further savings to be implemented in Q2 FY25, the sale of non-core assets, the streamlining of existing business, and the exit from complex or unprofitable services. Indicative of the positive financial impact flowing from these initiatives, between FY22 and FY24, revenue within Novatti's core Payments Australian/New Zealand business has increased 173%, customers have jumped by 76%, and gross transaction value has surged by 143%. With the boost to Novatti's financial performance from these initiatives continuing to flow through, we remain committed to our targets of monthly positive operating cashflow by January 2025, and an overall positive operating cashflow in the half year ending June 2025.

Summary of Novatti Group (ASX:NOV) capital raising announcement

Novatti Group Limited (ASX:NOV) has announced a capital raising initiative to raise up to $9.4 million, with strong support from professional and institutional investors. The proceeds from the capital raising will be allocated to vertical market penetration, brand refresh, repayment of liabilities, new business initiatives, and general working capital. The company's CEO, Mark Healy, emphasized the positive financial impact of the initiatives undertaken, with a focus on achieving monthly positive operating cashflow by January 2025 and an overall positive operating cashflow in the half year ending June 2025. The capital raising aims to fund initiatives that unlock key catalysts for growth, particularly within Novatti's existing core Australia and New Zealand payments business, with a target of achieving a 70%+ gross margin by FY27.