Sign up Australia
Proactive Investors - Run By Investors For Investors

Velpic completes rights issue and builds cash to $3.2 million as NowForce gains traction

Completion of the rights issue will assist the company in growing revenues in 2018.
Picture of cash
Increased revenues and higher margins are expected to result in earnings growth in 2018

Velpic Ltd’s (ASX:VPC) completion of its rights issue shortfall is a positive development for the company as it builds its cash position to $3.2 million after costs.

This also includes the group’s US$1 million investment in NowForce which complements Velpic’s Learning Management Systems (LMS) technology.

The group’s more robust cash position will enable it to pursue new opportunities that went available prior to its investment in NowForce.

READ: Velpic teams up with NowForce to enter US$220 billion security services sector

Growth in revenues and cash flow forecasts for 2018

Completion of the rights issue leaves the company well-placed to grow both revenues and cash flow over the next 12 months.

Russell Francis, chief executive officer, said: “To have such a strong take-up of the placement in December and the rights issue in January demonstrates the confidence that our shareholders have in Velpic and our growth strategy going forward.

“We are very pleased with the accelerated roll out of Velpic Security and the partnership with NowForce is already providing us with opportunities for revenue growth in 2018.”

Margins improve as revenues grow

Demand is increasing for Velpic Security products and a pipeline of opportunities has already been established.

The entry level pricing for the security product starts at AU$25,000 per annum.

This is significantly higher than the current average pricing of circa $7200 per annum for Velpic LMS.

The increased revenue per customer combined with the higher margin per customer is projected to accelerate earnings growth.

Cross selling opportunities also have the potential to drive growth in 2018.

View full VPC profile View Profile

Velpic Ltd Timeline

Related Articles

picture of trading screens
July 12 2018
With an optimistic outlook on future earnings, the company expects to recommend its first dividend in the second half of the current financial year.
Data servers
July 31 2018
The company is expected to list on the main board of the LSE in September
September 01 2018
The tech group is increasingly expanding its geographical reach and gaining traction in China

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use