Admission to Trading on AIM

RNS Number : 7074Z

Pelatro PLC

19 December 2017

 

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF IRELAND, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW.

19 December 2017

Pelatro Plc

("Pelatro" the "Company" or the "Group")

Admission to Trading on AIM and First Day of Dealings

Pelatro, the precision marketing software specialist, is pleased to announce the admission today of its Ordinary Shares to trading on the AIM Market of the London Stock Exchange ("Admission").  finnCap is acting as Nominated Adviser and Sole Broker to the Company in relation to Admission.

Highlights

·     Dealings in the ordinary shares of 2.5 pence in the capital of the Company (the "Ordinary Shares") will commence at 8.00 am today under the ticker "PTRO" with the ISIN GB00BYXH8F66.

·     Successful placing by finnCap which saw strong demand from a number of institutional investors, raising a total of £4.6 million.

·     A placing of 6,102,212 new Ordinary Shares, raising gross proceeds of £3.8 million for the Company, and 1,314,216 existing Ordinary Shares in the Company, raising gross proceeds of  £0.8 million for the selling shareholder, all placed with institutional and other investors, at a price of 62.5 pence per Ordinary Share (the "Placing Price").

·     The Company's market capitalisation on Admission, based on the Placing Price, is expected to be £15.2 million.

The Company's Admission Document will be available at http://www.pelatro.com/investors as of Admission.

Subash Menon, Managing Director of Pelatro Plc, commented:

"Our Admission to AIM today marks a major milestone for Pelatro and places us in a strong position to continue with our expansion plans.

"We are delighted at the support we have received from a number of blue chip institutions and thank them for the confidence they have shown. Our intention is to extend the reach of our innovative marketing of software and services globally, a process we can now accelerate with the use of the float proceeds.

"Access to the public markets will allow Pelatro to invest in, and take advantage of, growth opportunities. In addition, it will improve our stature with both existing and potential customers.

"We look forward to life as a public company and to updating our shareholders on our progress."

Enquiries:

Pelatro Plc Subash Menon, Managing Director Nic Hellyer, Finance Director	C/O IFC
finnCap Limited (Nominated Adviser and Broker) Adrian Hargrave / Giles Rolls / Kate Bannatyne (Corporate Finance) Stephen Norcross / Sultan Awan (Corporate Broking)	[phone]
IFC Advisory Limited (Financial PR & IR) Tim Metcalfe / Graham Herring / Miles Nolan	[phone]

Background to the Company

Pelatro Group was founded in March 2013 by Subash Menon and Sudeesh Yezhuvath; who had previously worked together in developing Subex Limited, a global leader in Telco software for business optimisation. Pelatro Group was established with the objective of offering specialised, enterprise class software solutions for precision marketing campaigns.

The focus of the business has been on the Telco vertical market which has been undergoing a series of challenges, including market maturity, saturation and customer churn. In addition, there are increased customer demands and higher expectations of Telcos' offering at lower price points. Pelatro undertook extensive studies of the industry's requirements and designed an innovative solution based on the fundamental premise that Telcos need to move away from a 'one size fits all' approach and address each individual subscriber with products and offerings that are contextual, relevant and personalised. Pelatro entered into an engagement with a software development centre (the "SDC") in India in 2015 to develop, implement and support the software, mViva. Pelatro acquired the SDC on 12 December 2017

Product and Technology

The Directors believe that Telcos face a growing number of challenges: their products and services have become increasingly commoditised and thus differentiation is becoming more of a challenge. Further, end users tend to look at telecommunications services as a utility, resulting in decreasing margins for Telcos. Finally, as a mature industry, the revenue potential from new customers is limited. Telcos need to look to existing customers to generate new revenue streams.

The Directors believe that these challenges call for a three pronged strategy from the Telcos:

• Increase Average Revenue Per User ("ARPU")

• Increase customer retention

• Increase share of spend by each customer

This strategy requires that Telcos adopt a new approach, by engaging end users in a personalised manner and through continuous dialogue, which can then help the Telco to understand the actual needs of the customer and market accordingly.

Following extensive discussions with a number of Telcos, the Directors believe that a significant element of those Telcos' strategy will be focused on effective campaign management, which benefits from precision marketing. Pelatro's success in winning contracts demonstrates recognition of this by Telcos and establishes the fact that Pelatro's product has helped Telco customers to increase their revenue materially.

Current Trading and Future Prospects

The Directors are pleased with the Company's performance during the current year to date, which is in line with expectations and shows continued new business wins and increasing demand for the Company's products and services. The interim results for the six months ending 30 June 2017 demonstrates revenues increased to US$1.55m from US$0.2m and a profit before tax increase to $0.8m from a small loss in the comparable period in the previous year.

As well as ongoing operations, the Company has continued to win new contracts in new geographies, adding Inwi, Dialog, Celcom and Expresso to its customer base this year. The Directors expect to announce further new contract wins over the coming months. In line with the Board's strategy and use of proceeds, the Company intends to expand the sales team to support increased marketing and business development.

Financial Information

The following summary financial information is extracted from the Company's audited accounts for the years ending 31 December 2015 and 2016 and the six months ending 30 June 2017 (unaudited).

	Six months ended 30 June 2017 $'000	Year ended 31 December 2016 $'000	Year ended 31 December 2015 $'000
Revenue	1,548	1,205	353
Gross profit	1,194	573	114
Operating profit	972	360	30
EBITDA*	1,037	509	73
Capitalised software development costs	237	366	173

*EBITDA is operating profit after adding back depreciation and amortisation

Board of Directors

Richard Day (Non-Executive Chairman)

Richard joined the Board of Pelatro as Non-Executive Chairman in August 2017. Richard is a qualified solicitor with an abundance of experience in the financial services industry. Richard co-founded Arden Partners in 2002 and was instrumental in launching their admission to AIM in 2006. Richard also helped in taking Cogenpower to AIM in 2016, a combined heat and power generating company of which he has been Non-Executive Director since 2015. In addition to this, Richard is currently the CFO of AIM listed iEnergizer and is on the board of EGS Energy as a non-executive director.

Subash Menon (Co-Founder and Managing Director)

Subash co-founded the Group in April 2013. Prior to Pelatro, Subash was the CEO and Founder of Subex Limited ("Subex"), a company he transformed from a systems integrator in telecoms hardware to a global leader in Telco software for business optimisation. Subash also guided Subex through a successful IPO in India (NSE and BSE) in 1999 and through seven acquisitions in the UK, US and Canada, driving revenues to in excess of US$100m, prior to leaving Subex in 2012.

Sudeesh Yezhuvath (Co-Founder and Executive Director)

Sudeesh co-founded the Group with Subash in 2013. Sudeesh joined Subash at Subex in 1993, where he worked as a Sales Engineer. There, he progressed to a board Director and Chief Operating Officer. Sudeesh exited from Subex in 2012, by which time it had grown to be a global leader with over 200 Telco operators, across more than 70 countries.

Nicholos (Nic) Hellyer (Finance Director)

Nic joined Pelatro in August 2017 as Finance Director. Nic is a Chartered Accountant who brings a wealth of board level experience from his 25 years' in Investment Banking. Nic spent the majority of his banking career at UBS and HSBC, advising on a wide range of transactions including public takeovers, private M&A, IPOs and other equity fund raisings. Nic has also spent time in industry as CFO of Buddi Limited, and is currently a consultant to Opus Corporate Finance.

Pieter Verkade (Non-Executive Director)

Pieter was appointed to the Board of Pelatro in November 2017 as Non-Executive Director. He is also currently the Chairman and Co-Founder of Viva Africa, an investment management company investing in artistic projects throughout Africa, a role he has held since February 2016. Prior to this he spent sixteen years working in numerous board level roles for various companies within the telecommunications industry. These included Telenor International, Orange and MTN, at which he worked across both Europe and Africa.

 

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