Novatti Group Ltd. · ASX:NOV
Novatti — Investor Presentation (July 2021)
21 slides from Novatti's investor presentation, Jul 2, 2021
Slide 1: Capital raising and strategic acquisition
Capital raising and strategic acquisition 2 July 2021
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Novatti Group Limited (“Novatti”, “NOV” or “the Company”) in relation to Novatti’s placement (“Placement”) of new fully paid ordinary shares in Novatti (“New Shares”) to certain institutional and sophisticated investors in accordance with section 708
Slide 3: Novatti enables businesses to pay and be paid
Novatti enables businesses to pay and be paid, from any device, anywhere. From corner stores and startups to global organisations, our solutions will unlock your ambitions. 3
Slide 4: Corporate profile
Corporate profile Substantial shareholders Number Number % Held Top 20 Holders 141,691,052 58.57% including substantial holders: Brayter Limited 46,631,507 19.28% Qing Li 22,907,452 9.47% $156m+ 244.2m ~$10m $2b+ and Director interests: Kenneth Lai 13,116,118 5.42% Market Cap1 Total Current Annual P
Slide 5: Business Overview
Business Overview • Novatti provides businesses with everything they need to pay and be paid • Focus on mobility through technology – using any device, anywhere Issuing Acquiring Processing Billing Banking* • Covers the complete payments value Prepaid Visa Enabling Including Including Licence cards
Slide 6: Strategy
Strategy • Leveraging our leading B2B ecosystem Technology combining: • Technology – digital and mobile platforms Fintech Digital Billing • Licences – opening jurisdictions and Wallets highlighting trust Payments • Partnerships – providing scale without substantial capital • Ecosystem now being mone
Slide 7: Multiple revenue opportunities
Multiple revenue opportunities • Novatti’s technology enables it to capture multiple revenue opportunities across the value chain • Typical revenue includes: subscription fees, project fees, and transaction fees • For example: Issuing Acquiring Banking $ $ $ $ Project fees Transaction Project fees I
Slide 8: Growth track record
Growth track record • Strong track record of delivering consistent, FY18 FY19 FY20 H1FY21 H2FY21F3 $'000 $'000 $'000 $'000 $'000 long term growth, particularly in sales revenue • Quarterly sales revenue currently growing at Sales Revenue 5,425 8,416 11,004 7,350 8,300 37% year-on-year1 Other Income
Slide 9: Overview of capital raising
Overview of capital raising • $45m capital raising • Binding commitments to raise a total of $40m in a two-tranche placement, with a Share Purchase $45m Plan to raise up to $5m at A$0.55 per share Capital • Number of new offshore and Australian Raising institutions introduced to the register • Funds
Slide 10: Offer Summary
Offer Summary $45 million capital raising consisting of: • Two-tranche Placement to sophisticated, professional and other institutional investors in Australia and overseas to raise A$40 Offer million (before costs) (‘Placement’). Structure and - Tranche 1 (unconditional): 51.1 million New Shares to
Slide 11: Use of proceeds
Use of proceeds 1 Approx. $m Reckon strategic stake2 22.5 Growth capital/strategic 19.5 acquisition targets Licensing 3 Total1 45 1 Assumes $5 million raised under the SPP. 11 2 Acquisition of 19.9% interest in ASX listed Reckon Limited at $1.00 per share for approximately $22.5 million.
Slide 12: Expanding Novatti’s growth strategy
Expanding Novatti’s growth strategy Growth capital from the capital raising to be applied to: Expanding presence in Acquisitions Seeking to enter new existing markets Acquiring 19.9% strategic stake in markets Expanding team, including in Issuing Reckon Limited Launch in new markets including and Ac
Slide 13: Acquisition of strategic stake in Reckon
Acquisition of strategic stake in Reckon Sales/ EBITDA 120.0 Recent financial performance3 Net Debt 60.0 100.0 50.0 80.0 40.0 • Steady revenue profile - $75.6m FY20 (Dec)1 60.0 30.0 • Solid EBITDA - $32.6m FY20 (Dec)1 40.0 20.0 • Sustainable dividends – 5 cents p.a. paid2 20.0 10.0 0.0 0.0 • Strong
Slide 14: Reckon – overview
Reckon – overview Novatti will acquire a 19.9% strategic stake in Reckon - a leading accounting software provider, founded in 1987 and listed on ASX (ASX: RKN) $113.8m $75m+ $32m+ Market Cap1 Annual EBITDA2 Revenue2 $9.7m Global 100k+ NPAT2 Operations Subscription Customers3 1 Based on closing Recko
Slide 15: Reckon – transaction summary
Reckon – transaction summary • Reckon has a steady revenue and earnings profile, with over 100,000 customers in its business group. The business has strong cash flow generation, has significantly paid down its debt and historically paid sustainable dividends to its shareholders. • Novatti has entere
Slide 16: Reckon – business overview
Reckon – business overview • Reckon has three core businesses: Account Legal Practise Business Group Practise Management o Business Group - small business Management accounting and payroll Products SAAS Migrating to SAAS Migrating to SAAS Migrating to Cloud Cloud Cloud Revenue (FY20) A$38.5m A$26.6m
Slide 17: Reckon – growing cloud focus
Reckon – growing cloud focus 2 Cloud Users +35% 100000 • Invested heavily in shifting to the cloud 80000 +39% • Development spend has increased to just 60000 +15% 40000 less than $20m in 20201 20000 • This is seeing results with cloud users 0 increasing 35% from 2019 to 2020, 2018 2019 2020 position
Slide 18: Key Risks
Key Risks Risk Factors You should be aware that an investment in New Shares involves various risks. This section sets out some of the key risks associated with an investment in New Shares. A number of risks and uncertainties, which are both specific to Novatti, and of a more general nature, may adve
Slide 19: Key Risks
Key Risks Loss of underlying banking facilities Due to the nature of the business performed by Novatti, the Company relies upon a number of third party banking facilities and services. If these banking facilities and services are lost, it could negatively impact the Company’s ability to perform its
Slide 20: International Offer Restrictions
International Offer Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any
Slide 21: International Offer Restrictions
International Offer Restrictions Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document or materials in co