Comms Group Ltd · ASX:CCG
Comms — Investor Presentation (December 2020)
31 slides from Comms's investor presentation, Dec 17, 2020
Slide 1: Acquisition & Equity Capital Raising
Comms Group Limited (ASX: CCG) Acquisition & Equity Capital Raising 17 December 2020
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer Overview This investor presentation (“Presentation”) has been prepared by Comms Group Limited (ACN 619 196 539), formerly Commschoice Group Limited, (“Comms Group” or “Company”) and is dated 17 December 2020. This Presentation has been prepared in relation to a propos
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Financial data Except where otherwise mentioned, all dollar values are in Australian dollars (“A$”). Any pro-forma financial information provided in this Presentation is for illustrative purposes only and is not represented as being indicative of Comms Group‘s views o
Slide 4: Important Notice and Disclaimer
Important Notice and Disclaimer Disclaimer To the maximum extent permitted by law, no representation or warranty, express or implied, is made as to the currency, accuracy, reliability or completeness of information in this Presentation and Comms Group and its advisers, affiliates, related bodies cor
Slide 5: Executive Summary
Executive Summary Comms Group (ASX: CCG) is a leading business Telco service provider with a broad product suite servicing SME & corporate mid-market customers and wholesale & partner customers Capital Structure Primarily operating in Australia and increasingly offshore supporting corporate mid-mark
Slide 6: Executive Summary
Executive Summary Comms Group is raising approximately $6.25m through a conditional placement at $0.08 per share for the acquisition of the shares of Next Telecom Pty Ltd (Next Telecom) and working capital, acquisition integration and transaction costs and to strengthen the balance sheet to support
Slide 7: Agenda
Agenda 1. Market Dynamics and Comms Group Overview 2. Next Telecom Overview, Acquisition Benefits & Terms and Combined Financials 3. Future Growth 4. Capital Raising 5. Key Risks & International Offer Restrictions Comms Group 7
Slide 8: 1. Market Dynamics and Comms Group Background
1. Market Dynamics and Comms Group Background
Slide 9: Market Dynamics
Market Dynamics Comms Group’s position and future growth strategy / target markets relative to the SME and corporate mid-market segments and the Company’s product & service offering as shown opposite. There is significant opportunities for growth in the corporate mid-market particularly through Unif
Slide 10: Comms Group Overview
Comms Group Overview Voice Networks Data Network Managed Services Services • Replace legacy ISDN & PABX lines • Multi-carrier • SD WAN • Advanced cloud business phone (domestic) • Fibre, NBN • Design, Deliver, Ongoing • Global PBX International • NBN Enterprise Ethernet Management and Support • Indu
Slide 11: Our expanding global network
Our expanding global network CommsChoice is a leader in Microsoft Teams calling for global businesses particularly in the Asia Pacific region. Extensive international network with the most extensive Asia Pacific coverage. Recently completed expansions into China, Japan, Philippines & HK. The first a
Slide 12: 2. Next Telecom Overview, Acquisition Benefits & Terms
2. Next Telecom Overview, Acquisition Benefits & Terms
Slide 13: Next Telecom Overview
Next Telecom Overview Next Telecom is a telecommunications service provider targeting the corporate mid-market in Australia Overview Customers Founded in 2008, Next Telecom is an established and multi- Next Telecom has established a high-quality customer base, service award winning telecommunication
Slide 14: Acquisition Benefits
Acquisition Benefits The Next Telecom acquisition fits Comms Group’s acquisition criteria to increase scale and further strengthen its position in the corporate mid-market Complementary customer Expanding Comms Group’s customer base, particularly in the corporate mid-market base sector (100 seats +)
Slide 15: Acquisition Terms
Acquisition Terms Next Telecom represents a highly compelling strategic acquisition of a complementary competitor in the corporate mid-market telco space in Australia, adding scale to Comms Group’s existing business Acquisition terms Comms Group has reached an agreement to acquire Next Telecom Pty L
Slide 16: Combined Financials
Combined Financials Represents a transformational acquisition with significant increase in scale of Comms Group FY20 Revenue ($m) 40.0 Summary P&L Comms Group Next Telecom Combined 35.0 30 June YE ($m) FY20A FY20A FY20A 30.0 15.6 Total Revenue 19.3 15.6 34.9 25.0 20.0 Gross Profit 9.2 5.1 14.4 34.9
Slide 17: 3. Future Growth
COMMS global cloud communications 3. Future Growth
Slide 18: 4 Pillar Growth Strategy
4 Pillar Growth Strategy Comms Group has a longer-term roadmap to grow to scale through the following 4 growth pillars: Domestic Wholesale Overseas Strategic Growth Partners Growth Acquisitions • SME • Contact centre • Corporate MNC • SME • Corporate • IT Providers • Asia Pacific focus • Corporate •
Slide 19: 4. Capital Raising
COMMS global cloud communications 4. Capital Raising
Slide 20: Equity Raising Overview
Equity Raising Overview Offer Structure & Size Placement to raise $6.25m comprising: • $3.7m from the issue of 46.7m new Comms Group shares (New Shares) under Comms Group’s existing placement capacity pursuant to ASX Listing Rule 7.1 and 7.1A; and • $2.5m through the issue of 31.4m New Shares subjec
Slide 21: Capital Structure – Post Transaction
Capital Structure – Post Transaction Capital Structure – Post Transaction Current number of shares on issue 191.4m Total placement shares 78.1m Upfront scrip consideration shares* 71.0m Total shares on issue post placement and acquisition 340.5m Shareholders – Post Transaction % Existing shareholder
Slide 22: Equity Raising Timetable
Equity Raising Timetable Event Time / Date (AEDT) Transaction announced and Comms Group resumes trading on ASX 17 December 2020 Settlement of Tranche 1 Placement shares 22 December 2020 Quotation of Tranche 1 Placement shares 23 December 2020 Release notice of Extraordinary General Meeting (EGM) and
Slide 23: Sources and Uses
Sources and Uses Sources Amount ($m) Uses Amount ($m) Capital Raising 6.25 Next Telecom Acquisition – cash 2.0 consideration Working capital / acquisition integration 1.7 and transaction costs Strengthen the balance sheet to 2.55 support additional acquisitions Total sources 6.25 Total uses 6.25 Com
Slide 24: 5. Key Risks & International Offer Restrictions
5. Key Risks & International Offer Restrictions
Slide 25: Key Risks
Key Risks RISK FACTORS There are a number of factors, both specific to Comms Group and of a general nature, which may affect the future operating and financial performance of Comms Group, its products and services, the industry in which it operates and the outcome of an investment in Comms Group. Th
Slide 26: Key Risks
Key Risks Competition risk Comms Group operates in a competitive market. A loss of customers may negatively impact earnings. Additionally, the risk from increased competition may negatively impact on sales and profitability. The actions of an existing competitor or of new competitors may make it dif
Slide 27: Key Risks
Key Risks Dividends There is no guarantee as to future earnings of Comms Group or that Comms Group will be profitable at any time in the future, and there is no guarantee that Comms Group will be in a financial position to pay dividends at any time in the future. Next Telecom Pty Ltd acquisition – D
Slide 28: Key Risks
Key Risks GENERAL RISK FACTORS Share market On completion of the Placement, the New Shares may trade on ASX at higher or lower prices than the issue price. Investors who decide to sell their New Shares after the Placement may not receive the amount of their original investment. The price at which th
Slide 29: Key Risks
Key Risks Legislative and regulatory changes Legislative or regulatory changes in jurisdictions in which Comms Group operates, including property or environmental regulations or regulatory changes in relation to products or services sold by Comms Group, could have an adverse impact on Comms Group. F
Slide 30: International Offer Restrictions
International Offer Restrictions International Offer Restrictions This document does not constitute an offer of New Shares of Comms Group 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 sol
Slide 31: 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