FND - Findi Limited

[galumay]

I would expect there will be a consolidation at some point

Well I got that right, still not for me.

 

[Dona Ferentes]

the dump continues.

 

[makteb]

Lower highs until today.

VOR getting no love.

 

[Dona Ferentes]

put your head over the parapet, and someone takes a potshot

Things may not be as clean as they wish: "Company’s aspiration is organic revenue growth of 20-30% in FY21. New business wins from May through July 2020 of ~$3.6 million supports this aspiration. Given the current pipeline of customer contracts signed to date, management expects September 2020 quarter revenue to be $2.9 to 3.2 million, a ~30-45% increase compared to $2.2 million revenue in September 2019 quarter". ........ find out soon.

 

[Dona Ferentes]

Vortiv is in a Trading Halt; the Company expects to make an announcement to the market regarding a sale of business. .

Likely to be the TSI bit, described as latent. Vortiv 25% passive investment in TSI India revised to $5.5 million. It will be interesting to see if they get this amount. will have a clean Cyber security company; expect a few corporate actions down the track?

 

[Dona Ferentes]

Vortiv is in a Trading Halt; the Company expects to make an announcement to the market regarding a sale of business. .

Likely to be the TSI bit, described as latent. Vortiv 25% passive investment in TSI India revised to $5.5 million. It will be interesting to see if they get this amount. will have a clean Cyber security company; expect a few corporate actions down the track?

or ... they won't have a Cyber busness at all??

PROPOSED SALE OF CLOUDTEN AND DWX FOR $25M
CyberCX, one of Australia’s leading cyber security services organisations, proposes to acquire 100% of the shares in both Cloudten Industries Pty Ltd and Decipher Works Pty Ltd, based on the following key terms:
• total consideration reflecting a combined enterprise value of $25 million, on a cash free and debt free basis, with normal level of working capital;
• 100% paid in cash on completion; and
• sale completion is subject to the following key conditions:
o Vortiv shareholder approval;
o CyberCX gaining FIRB approval to acquire the Business;
o retention of key staff and key customers; and
o no material adverse change occurring in the Business prior to completion.

As the Business presently represents the main undertaking of Vortiv, the Board will convene an Extraordinary General Meeting, scheduled for early December 2020, to obtain the approval of Shareholders as required under ASX Listing Rule 11.2, for the sale of the Business to CyberCX.

Where Vortiv shareholders vote in favour of the transaction, it is then expected to proceed to Completion on or around 18 December 2020.

UNANIMOUS BOARD RECOMMENDATION
The Directors unanimously recommend that Shareholders vote in favour of the transaction, in the absence of a superior proposal emerging. Further, each Director who is also a shareholder and who is not otherwise restricted from voting intends to vote in favour of transaction.

USE OF SALE PROCEEDS
Subject to completion of the transaction, Vortiv intends to return approximately $20 million to shareholders, in the form of a limit based equal access share buyback. This amount represents the vast majority of net sale proceeds after accounting for estimated tax payable on the gain on sale of the Business plus legal and advisory costs directly associated with the transaction, collectively totalling approximately $3 million. Vortiv is applying for an ATO Class ruling which seeks confirmation of the related tax treatment of the Buyback. Such ruling is expected to be received by January 2021, with the Buyback to proceed shortly thereafter.

BUYBACK
The Company will set a limit of $20 million to undertake the Buyback, with the buyback price to be set with reference to the share price at that time. Shareholders will be able to tender as many or as little shares as they choose to be bought back by the Company, up to their full holding.
At the conclusion of the Buyback offer period, all buyback requests will be tallied. Where there is an undersubscription (i.e. less shares tendered for sale by shareholders than the Limit set by the Company), then all shares tendered will be bought back by the Company and such shares subsequently cancelled. Where there is an oversubscription (i.e. more shares tendered for sale by shareholders than the Limit set by the Company), then all offers to sell Shares will be proportionately scaled back. All shares bought back by the Company will be subsequently cancelled. This mechanism provides shareholders with a choice to stay invested in the Company as it continues to pursue new acquisition opportunities.

INTENTIONS FOR VORTIV POST TRANSACTION
Following completion of the Transaction, the Board intends Vortiv remains an ASX listed company, with its shareholding in TSI India, then forming the main undertaking. The Board has identified acquisition opportunities in the Australian technology sector that can complement the Company’s exposure to ATM and associated payments technology which the Company has through its shareholding in TSI India. These opportunities are currently at an early stage and may not ultimately progress to a transaction. A further update to shareholders will be provided at the appropriate time.

Where the Company proceeds with an acquisition which is either significantly larger in value than its shareholding in TSI India and/or in a different industry segment, ASX will invariably exercise its discretion under Listing Rule 11.1.3 to require the Company to re-comply with ASX’s admission and quotation requirements

 

[galumay]

For me personally this has been a rewarding example of doing the work researching and analysing the business, deciding it was not investible for me, predicting the consolidation, and made the correct decision by not investing.

Its been my single biggest improvement as an investor, not buying the bad businesses. You dont need to be particularly good as picking the best businesses if you can just avoid the really bad ones!

At least shareholders will get most of their money back (depending on how much they paid.)

 

[Dona Ferentes]

CLARIFICATION ON PROPOSED SHARE BUYBACK

• Proposed Buyback price of between 18.5 cents and 19.5 cents per share, supported by net tangible asset backing post sale of cyber assets
• Buyback provides choice and flexibility to shareholders to tender as many or as little shares as they choose to be bought back

 

[Dona Ferentes]

CLARIFICATION ON PROPOSED SHARE BUYBACK

• Proposed Buyback price of between 18.5 cents and 19.5 cents per share, supported by net tangible asset backing post sale of cyber assets
•

sale of Decipher Works and Cloudten Industries to CyberCX has now completed. The terms of the sale for cash consideration of $25 million, on a cash free debt free basis, were set out in the announcement on 22 October 2020 and the notice of extraordinary meeting released 11 November 2020.

The Company is intending to return approximately $20 million to shareholders subject to an Australian Tax Office (ATO) Class Ruling on the tax treatment of the proposed limit-based equal access share buyback (final figure dependent on tax payable and costs of the transaction). The purpose of seeking the Class Ruling is to ensure that the Company returns funds to its shareholders in the most tax effective way available.

Vortiv continues to engage with the ATO regarding the buyback proposal and will seek approval from shareholders for the share buyback once the ruling has been received.

Board Changes
With the sale of the cyber security business, the Company advises that Mr Gary Foster has stepped down as Chairman of the Board. Mr Foster has served as Chairman for more than three years and has been a director for over 10 years. Mr Foster will remain as a non-executive director and provide transition support to the Board for the next few months.

Independent non-executive director, Mr Howard Digby has been appointed to the role of Chairman. Mr Digby is an experienced director who brings 30 years of experience in the technology sector to help Vortiv identify and evaluate new business opportunities.

Mr Phil Macleod has been appointed as a non-executive director in addition to his existing role as Company Secretary. Mr MacLeod has over 25 years commercial experience and has provided corporate, management and governance advice to Australian and international public companies involved in the technology, resource, healthcare and property industries.

- so, tried cybersecurity; and now, another tech reinvention?
... but first, arbitrage vs slumber

 

[Dona Ferentes]

two deviations from what is very much waiting for Godot

1. Dip on 18th when a resigning director sold out
2. Run-up after a "Change of Substantial Holding" notice lodged ( by one Troy Harry , the sole director of Rocket Science Pty Ltd and the principal of The Trojan Capital Fund. He is also a director of Norfolk Enchants Pty Ltd )

... and back to 18.5c and waiting on tax treatment / new incarnation to be revealed

 

[Dona Ferentes]

Return of $21.7 million to shareholders

• The Company today declares a $7.8 million fully franked dividend , equating to 5.55 cents per share + imputation (credit of 1.85 cents per share)
• A further $13.9 million to be returned to Shareholders as an Equal Capital Reduction, subject to shareholder approval. EGM scheduled to be held in latter part of April 2020, the Equal Capital Reduction will see a further 9.89 cents per share paid to shareholders.

Activities Post Return of Capital

Following completion of the Dividend and Equal Capital Reduction the Company will hold working capital of approximately $750,000, noting that the Company has recently paid tax of $1.96 million in relation to estimated current year tax profits in addition to the costs associated with the sale of the cybersecurity assets.

The retained capital will be used by the Company to ensure it remains a going concern whilst the Board continues to assess and identify high growth opportunities in the Australian technology sector that the Board considers will have the potential to add value to shareholders. The Company has had and continues to have meaningful conversations regarding various acquisition opportunities, but as at the date of this announcement those opportunities remain subject to ongoing discussions and due diligence and there is no certainty that any complete proposal or transaction will result from the ongoing discussions.

Following the return of capital, the Company will also continue to hold its approximately 25% interest in TSI India, a business operating a network of bank automated teller machines and bill payment systems in India.

 

[greggles]

Announcement released today:

VOR is starting to look cheap to me. Revenue of $70-75 million and EBITDA of $20.5-22.5 million per annum, yet a market cap of under $15 million. What am I missing?

 

[Dona Ferentes]

Vortiv Limited (ASX Code: VOR) is pleased to advise that having received approval from shareholders to change the company’s name at the 2022 Annual General Meeting held on 22 August 2022, the name of the company changes to:

Findi Limited

The name aligns with the company’s strategy, and the “Findi” name will also be utilised by the Company’s main operating subsidiary domiciled in India. The change of name took effect on 22 August 2022 when ASIC altered details of the Company's registration.

Due to the pending share consolidation, the effective date for the name and ASX code change to FND on the ASX platform will be 19 September 2022.

 

[Dona Ferentes]

Following positive financial results in FY22, the renegotiation of finance arrangements and securing a five-year agreement with the Central Bank of India, the Company is pleased to provide guidance of:
• Revenue of A$47-50m (6-13% year on year increase)
• EBITDA of A$13-14m (100%+ year on year increase)
• EBITDA margin of 25%

The Indian financial services sector, supported by the Reserve Bank of India, is transforming and moving towards enhanced financial inclusion through greater penetration of financial services. Over the next three to four years, Findi will transition to a specialised Transaction Banking services provider in order to support this transformation.

So the company could move away from ATMs towards a digital offering.? Applying for a transaction banking licence (for “white label” ATMs) whilst continuing to develop and commercialise its digital payments solutions, which will be a key growth driver for the business into the future.

Announcement released : VOR is starting to look cheap to me. Revenue of $70-75 million and EBITDA of $20.5-22.5 million per annum, yet a market cap of under $15 million. What am I missing?

Numbers look lower @greggles than before.

The 'transformation' of VOR to FND includes new management and board (at cursory examination) and there has also been

• Company is proposing that every twenty shares on issue will be consolidated into one Share
• A$10 million loan facility with Pure Asset Management Aug 2022
• In Oct 2022, a heavily oversubscribed capital raising of $2.8million at $0.40 per share (no discount to 15-day VWAP); Raise upsized due to demand with strong support from major Findi shareholder; Board of Directors subscribed for $550,000 of the placement, subject to shareholder approval

 

[greggles]

Following positive financial results in FY22, the renegotiation of finance arrangements and securing a five-year agreement with the Central Bank of India, the Company is pleased to provide guidance of:
• Revenue of A$47-50m (6-13% year on year increase)
• EBITDA of A$13-14m (100%+ year on year increase)
• EBITDA margin of 25%


So the company could move away from ATMs towards a digital offering.? Applying for a transaction banking licence (for “white label” ATMs) whilst continuing to develop and commercialise its digital payments solutions, which will be a key growth driver for the business into the future.


Numbers look lower @greggles than before.

The 'transformation' of VOR to FND includes new management and board (at cursory examination) and there has also been

• Company is proposing that every twenty shares on issue will be consolidated into one Share
• A$10 million loan facility with Pure Asset Management Aug 2022
• In Oct 2022, a heavily oversubscribed capital raising of $2.8million at $0.40 per share (no discount to 15-day VWAP); Raise upsized due to demand with strong support from major Findi shareholder; Board of Directors subscribed for $550,000 of the placement, subject to shareholder approval

Market cap now ~$12.3 million. They recently raised $2.8 million via the issue of 7 million new shares at 40c per share. The placement was oversubscribed which is a good sign.

India is a growth market and digital payment solutions are the future, so if it can establish a good foothold in that market this could be a great stock in the medium term. Share price has been very stagnant for most of this year so I would need to see the start of an uptrend before getting interested.

 

[Dona Ferentes]

And I think there's a SPP underway. A mate was asking... ATMs are becoming dinosaurs, or is India different? It strikes me as a place with sophisticated digitised urban middle class, and myriad dollar a day villages.

And the move to digital payment systems ; a crowded field with deep pocketed incumbents, internationals and of course local nationalist policies.

 

[peter2]

CEO mentioned that cash (via ATMs) is still important in regional areas. The TSI network has value because it accesses these areas. CEO also mentioned desire for Findi to become regional digital bank yet in same discussion mentions that most people in regional areas don't have mobile phones.

Happy to avoid this one.

 

[Dona Ferentes]

CEO mentioned that cash (via ATMs) is still important in regional areas. The TSI network has value because it accesses these areas. CEO also mentioned desire for Findi to become regional digital bank yet in same discussion mentions that most people in regional areas don't have mobile phones.

My memory of India, especially in regional areas, is of grubby battered notes that wouldn't be fit for an ATM.

Happy to avoid this one.

ditto. How many payments systems have tried, here in Oz?

 

[Dona Ferentes]

CEO mentioned that cash (via ATMs) is still important in regional areas. The TSI network has value because it accesses these areas. .

With young Albo over in India, every business leader wanted to be part of the delegation.

“I’ve been going to India for 30 years and sadly, there have been some false dawns. This time it feels different”.​

- Shayne Elliott, CEO, ANZ Group Ltd


... ....and aspiring FND is still there, trying to make a go of it.

 

[Dona Ferentes]

from a Bloomberg article... a big market, but I wonder how some outsider will go , up against the big players...
.
On more than 6 billion separate occasions in just one month, the ringing of cash registers in India was replaced by audio confirmations on a digital sound box. Add instances of people paying one another rather than merchants, and the world’s most-populous nation drummed up more than 10 billion cashless transactions in August. All were online, instantaneous ..… and cost nothing.

At least most of them didn’t. Since April, customers dipping into their mobile-phone wallets to settle bills of more than 2,000 rupees ($24) may have to bear a part of a 1.1% fee, but only if they are scanning a different platform’s quick-response code....
.
DNH