PC have a "Buy" call on PPE and a 12-month Target Price of $2.85 (was $4.05).
The share price plan (SPP) to existing shareholders that was aiming to raise $5.5M was oversubscribe to a value of $43.5 M, so almost 8 times oversubscribed. The applications will be scaled back to $5.5M. This is probalby not a shock since the SPP was for $1.10 per share and PPE has been trading as high as $2-2.24 in the last week.
Date: 14 May 2020 – People Infrastructure Ltd (ASX: PPE) (“Company”), a leading workforce management company that delivers innovative solutions to workforce challenges, today announced an update on its expected performance for the financial year ending 30 June 2020.Managing Director, Mr Declan Sherman said, “COVID-19 and the associated government response has created some broader uncertainty in the market and as a result People Infrastructure believes it is prudent to update the market on its expectations for the Company’s performance for FY2020. Based on current available information, People Infrastructure presently expects its FY2020 normalised EBITDA1, 2 to be in the range of $24million to $25 million.” People Infrastructure acknowledges that the COVID-19 situation continues to evolve and factors that support and may increase the Company’s 2020 performance include continued demand for staff services across its divisions and in particular, an increase in demand for staffing in its general staffing business, increased business in its facilities maintenance business, and a recovery in its information technology and nursing businesses. Considerations that may dampen its 2020 performance include reduction in work available for employees on government funded employee and employer support schemes or broader reduction in demand for staffing services in certain industries which have been more negatively impacted including hospitality and childcare. The Company also confirms its previously stated dividend policy to pay out of 45% to 60% of NPATA as dividends each year.
PEOPLE INFRASTRUCTURE TO RAISE $17.6 MILLION VIA SHARE PLACEMENT AND UNDERWRITTEN SHARE
· $17.6 million to be raised through a share placement of $12.1 million (the “Placement”) and a fully
underwritten share purchase plan (“SPP”) of $5.5 million at $1.10 per fully paid ordinary share
· Approximately 16 million new fully paid ordinary shares to be issued across Placement and SPP
· The Offer has been well supported by a number of existing and new investors
· The Offer proceeds will be used to fund future acquisition opportunities that will emerge as a result
of the current volatile economic conditions from COVID-19 and provide additional balance sheet
support for the period that the business is impacted by COVID-19
· People Infrastructure generated strong cash inflows in the 3 months to 31 March 2020
People Infrastructure Ltd (“People Infrastructure”) is pleased to announce that it has received
commitments to raise $12.1 million in new equity via a placement of new fully paid ordinary shares to
institutional, professional and sophisticated investors, to be followed by a fully underwritten SPP to raise
a further $5.5 million (together the “Offer”). The Offer will result in the issue of approximately 16 million
new fully paid ordinary shares in People Infrastructure at an issue price of $1.10 per share which is a
15.1% discount to the previous day close and 2.8% discount to the 10 day VWAP.
People Infrastructure received significant interest from existing and new investors for participation in the
Placement, which was well in excess of the available allocations.
Managing Director, Declan Sherman said “We are delighted by the support received for the Offer,
reflecting the market support for the Company’s strategy to navigate the impact of COVID-19 and
continue to acquire attractive complementary businesses. On behalf of the Board I would like to thank
existing shareholders for their ongoing support and welcome new investors to the register.”
In relation to acquisition and investment opportunities, Declan Sherman said, “We are excited by the
opportunity this extra capital will bring to make further attractive investments and acquisitions in
subdued market conditions. Over the last 5 years, we have been an industry leader in acquiring successful
staffing businesses. As one of the few companies in the market seeking investment opportunities over the
next 12 months we believe we will be well placed to make attractive acquisitions.”
In relation to COVID-19, Declan Sherman said, “As with most businesses around Australia, COVID-19 has
the potential to have a significant short term impact on staffing businesses in general and also on aspects of People Infrastructure’s business as a number of workforces are facing some element of disruption.
There is still a significant amount of uncertainty as to what the eventual impact will be, however to date
the impact has been limited to our childcare staffing and hospitality payrolling business, and more
recently parts of our nursing business and parts of our IT business focused on permanent recruitment. To
date there has been no material impact on our general staffing business, our facilities maintenance
business, our community staffing solutions business, our IT contracting business or our contract planting
business. People Infrastructure believes that there should be a strong bounce back in demand once
workforces resume a more stable pattern of operations”.
The Placement is expected to settle on Thursday, 16 April 2020 and the shares issued under the
Placement are intended to be issued without a disclosure document on Friday, 17 April 2020.