Plexure undertakes NZ$32m placement and NZ$5m SPP

Highlights o Underwritten A$30.0 million private Placement to institutional and sophisticated and professional investors in eligible jurisdictions. o Seeking a secondary ASX listing (ASX foreign exempt listing) and maintaining NZX primary listing. o Non-underwritten Share Purchase Plan (SPP) of up to NZ$5.0 million to enable NZ shareholders to participate on the same terms as the Placement. o Funds raised to support accelerated expansion of the Company's global customer base and fund further product innovation. o Key customer and shareholder McDonald's will participate in the Placement to maintain its current 9.9% shareholding. o H1 FY21 revenue growth of 23% to $14.4 million versus prior comparable period. o Revenue guidance for FY21 of $29.1 million, a 14% increase on FY20. Plexure Group Limited (NZX:PLX) (Plexure), one of the leading international specialist mobile engagement platform providers, announces that it is proposing to raise up to NZ$32.0 million through an underwritten A$30.0 million private placement (Placement) and a non-underwritten share purchase plan (SPP) to raise up to NZ$5.0 million (together, the Offer). Funds raised through the capital raising will be used to accelerate the Company's international growth by increased investment in the following areas: o Increased staffing to support customer expansion in new verticals and geographies; o Product innovation including data analytics, Ai and machine learning and platform capacity; and o Working capital. Plexure has previously announced that it was considering a possible IPO and ASX listing (and re-classifying its NZX listing to a secondary listing) and has received shareholder approval in this regard. Plexure has now determined that the most efficient way to achieve an ASX presence is to undertake an underwritten private placement to institutional and sophisticated and professional investors in Australia and New Zealand, seek a secondary ASX listing (an ASX foreign exempt listing) and maintain its NZX listing as its primary listing. The Company may migrate to a primary listing in Australia at a later date. In addition, the Company will undertake a non-underwritten SPP in New Zealand to allow New Zealand shareholders to participate in the Offer on the same terms as those institutional, sophisticated and professional investors participating in the Placement. Commenting on the capital raising, Plexure Chairman, Phil Norman said, "Plexure has established itself as a leading international specialist mobile engagement platform and a key marketing partner to well-known consumer brands that operate in high-frequency physical environments such as grocery and quick service restaurants. The Plexure platform delivers seamless personalised offers at scale to more than 210 million customers in 60 countries via their mobile devices to incentivise them to visit physical stores". "The Offer provides us with the opportunity to accelerate the strong international growth trajectory we have achieved in recent years through investment in our sales function. It will also allow us to continue to remain at the forefront of data-driven analytics and the use of Ai and machine learning by developing further enhancements to our platform and allowing for increased expansion in other geographies and verticals. Our recent inclusion in the well-known and highly regarded 2020 Gartner Magic Quadrant for Mobile Marketing Platforms - the only Australasian company to do so - puts us in an elite group of providers. We must continue to increase our product innovation so that we can leverage that advantage. In addition, the Australian secondary listing provides us with a new and deep source of capital for the future." Half-Year Results Plexure is pleased to release its trading results for the half-year ended 30 September and has made a separate announcement today of these results. During the first half of FY21, the Company continued to build on the financial foundations laid down over the previous three years. Revenues have continued to grow and along with this the associated platform costs have also increased. The Board and Senior Leadership Team (SLT) team made the decision to increase headcount to enable product development to be accelerated and undertake the platform enhancements required to support much larger user numbers and activity levels. An increased investment has also been made in the Company's sales and marketing capability. This increase in headcount is the principal driver of cost growth and is aligned with the Company's business strategy and capital raising plans. During the first half of FY21, the Company's revenue grew 23% to $14.4 million, compared with the same six-month period last year ($11.7 million). Recurring revenue (representing licence and support fees) increased by $1.7 million, or 19% to $9.0 million, while non-recurring revenue increased by $1.2 million, or 22% to $5.3 million. Non-recurring revenue represents funded development and one-off projects for customers. There has been a consistent pipeline of non-recurring revenue for several years and this will continue for the foreseeable future. The Company's cost base has increased by 79% to $18.8 million, compared with the same six-month period last year ($10.5 million), as it invested in product and platform development, staff, and professional costs. Increased users and platform activity have driven growth in IT costs from $2.6 million to $4.0 million. During the period, Plexure incurred some dual running costs as it moved parts of its platform between cloud providers. Re-architecting and modernising the platform remains a key focus for the business. Total staff and contractor headcount has increased by 69% from 139 to 161 and the associated wage and salary costs have increased by $4.5 million to $9.9 million. Most of this growth has been in the Company's engineering teams as it continues to employ further staff to modernise the platform and develop new products. As the Company requires significant capital for its next phase of growth, in July 2020 it announced its intention to investigate undertaking an Initial Public Offering (IPO) on the ASX. Expenses associated with this process were the major driver of the increase in professional costs from $1.7 million to $2.1 million. Other expenses increased to $0.7 million, including foreign exchange losses of $0.492 million. The majority of Plexure's revenue is either denominated in Japanese Yen or United States dollars while its cost base is mainly New Zealand dollar denominated. The strengthening New Zealand dollar since the start of financial year and the timing of payments from customers generated this foreign exchange loss. The EBITDA loss for the first 6 months inceased by $5.2m to $3.1m while the net loss after tax for the period attributable to shareholders increased by $5.6 million to $4.4 million. Earnings Guidance Plexure is also pleased to provide a trading update and forecast for the full year ending 31 March 2021. The Company will not be forecasting cash balances as that is dependent on the success of the Offer and the SPP. The Company's total revenue is forecast to grow 14% to $29.1 million for the full year. This forecast is based on revenue growth from existing customers only and does not include any new customer revenue for the year ended 31 March 2021. Based on the market opportunity and the capital raising, Plexure will continue to hire staff with a year-end headcount forecast of 190. The Company's hiring focus will be on its technology, product and data teams along with increased headcount in sales and marketing. Total staff and contractor costs are forecast to increase by $8.4 million to $21.3 million as a result of the growth in staff numbers. Increased usage on Plexure's technology platform and the growth in user numbers drives an increase in IT costs of $2.5 million to $9.0 million, while the costs associated with the capital raising add an additional $1.3 million to professional fees. The increased cost base results in a full year EBITDA loss of $7.0m and a net loss after tax of $10.0 million for FY21. Placement The Placement will be conducted via a bookbuild in which institutional and other sophisticated and professional investors in Australia and New Zealand will be invited to participate by Joint Lead Managers, Bell Potter Securities Limited and Ord Minnett Limited. A two-business day trading halt of Plexure's shares has been granted by NZX prior to the market opening today. The Placement has been underwritten at the offer price of A$1.13 (NZ$1.20), (Offer Price). This represents a discount of 23% to the last close of NZ$1.55 (A$1.45) and 20% discount to the volume weighted average price for Plexure shares over the preceding ten business days of NZ$1.50 (A$1.40). The corresponding NZ$ price to the Offer price was determined based on the NZ$:A$ foreign exchange rate as at 3.00pm (NZDT), Tuesday, 10 November 2020 from the Reserve Bank of New Zealand of NZ$:A$ 0.9375. Any shares not taken up in the Placement will be underwritten by Bell Potter and Ord Minnett at the underwritten Offer Price, pursuant to the terms of an underwriting agreement entered into with Plexure on 10 November 2020. McDonald's, a key customer and shareholder of Plexure, has committed to participating in the Placement to maintain its current 9.9% shareholding post settlement of the Placement. The Placement is conditional on the success of Plexure's application for an ASX foreign exempt listing. Completion of the Placement is anticipated to be around 24 November 2020. Share Purchase Plan The SPP will be offered to all eligible shareholders with a registered address in New Zealand, under which each eligible shareholder can apply for up to NZ$50,000 worth of new shares, subject to a NZ$5.0 million overall cap. The issue price under the SPP will be NZ$1.20, being the same price paid by investors in the Placement, at an exchange rate of NZ$:A$ 0.9375. The SPP has been structured to be as fair as possible to existing shareholders and should scaling be required it will be by reference to existing shareholdings. The SPP offer opens on 13 November 2020 and the Offer Document and Application Form in respect of the SPP offer will be sent to eligible shareholders on that date as well as being available at www.shareoffer.co.nz/plexure from that date. A timetable for the SPP is set out below. Record Date 5.00pm (Auckland time), 10 November 2020 Announcement of Offer, 11 November 2020 SPP Opening Date, 13 November 2020 Offer Document and Application Form sent to eligible shareholders, 13 November 2020 SPP Closing Date (last time for online applications, or for receipt of an Application Form, with payment), 5.00pm (Auckland time), 24 November 2020 Allotment of new shares under the SPP, 27 November 2020 These dates are subject to change and are indicative only. Plexure reserves the right to amend this timetable (including by extending the SPP Closing Date) subject to applicable laws and the Listing Rules. Plexure reserves the right to withdraw the SPP and the issue of new shares under it at any time before the date of allotment at its absolute discretion. NZX Class Waiver and Ruling Plexure is making the Offer in reliance on a class waiver and ruling issued by NZX Regulation dated 30 September 2020 enabling issuers to increase their placement capacity threshold by an extra 10% above the normal threshold of 15% provided for under NZX Listing Rule 4.5, where the company is impacted by COVID-19. The reasons for seeking the Placement have been described above. The impact of COVID-19 on Plexure has primarily been to slow the Company's sales pipeline, particularly in the grocery sector, as potential customers reacted to the pandemic. More recently, the Company's sales pipeline has improved as potential quick service restaurant and grocery customers seek ways of driving consumers back in-store. The grocery sector remains a focus for Plexure and the Company has continued to invest in its capability in this sector during the 2020 calendar year, despite market uncertainty related to COVID-19. This decision to continue to position the Company to capture market opportunities as the pandemic subsides has increased costs and reduced working capital. Ticker Code Plexure has applied for a foreign exempt listing on the ASX. Plexure will retain its primary listing on the NZX Main Board and remain subject to the NZX Listing Rules but its shares will be able to be traded on the ASX if its application for an ASX foreign exempt listing is successful. Plexure's ASX ticker code will be "PX1" if its application for an ASX foreign exempt listing is successful. Plexure's NZX ticker code will change from "PLX" to "PX1" from the date that Plexure's shares commence trading on the ASX if Plexure's application for an ASX foreign exempt listing is successful. Ends For more information please contact: Investors: Ronn Bechler, Market Eye P: +61 400 009 774 E: ronn.bechler@marketeye.com.au Media: Tristan Everett, Market Eye P: +61 403 789 096 E: tristan.everett@marketeye.com.au End CA:00363013 For:PLX Type:MKTUPDTE Time:2020-11-11 08:31:29