YPB Group — Update 24 May 2016

YPB Group — Update 24 May 2016

YPB Group

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YPB Group

Raises A$4.5m via an institutional placement

Capital raising

Industrial support services

24 May 2016

Price

A$0.30

Market cap

A$51m

Net cash (A$m) at 31 December 2015

4.8

Shares in issue

171.4m

Free float

27%

Code

YPB

Primary exchange

ASX

Secondary exchange

N/A

Share price performance

Business description

YPB Group has developed a three-pronged strategy to detect and protect brands from counterfeiters. The company owns four Chinese patents over invisible tracers and has secured several contracts for its technology.

Analysts

Finola Burke

+61 (2)9258 1161

Moira Daw

+61 (2)9258 1161

YPB Group is a research client of Edison Investment Research Limited

YPB Group (YPB) has completed an institutional placement of 18.75m shares at A$0.24/share raising A$4.5m. The placement was oversubscribed and brought six new institutions to the register. The company plans to use the net proceeds to accelerate conversion of its business opportunity pipeline into recurring revenues, expand into new markets and enhance its solutions suite through R&D investment. The placement follows an announcement by YPB last week that it expected to breakeven by Q117 and deliver a pre-tax profit of A$5m for FY17.

Year end

Revenue (A$m)

PBT*
(A$m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/14

0.1

(2.3)

(2.2)

0.0

N/A

N/A

12/15

1.7

(5.5)

(4.5)

0.0

N/A

N/A

12/16e

8.5

(2.7)

(1.6)

0.0

N/A

N/A

12/17e

22.2

4.3

2.0

0.0

15.0

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, share-based payments

The A$4.5m share placement was oversubscribed by A$500,000 and was supported by both existing and new shareholders, including six new institutional investors. The issue price of A$0.24/share is 19% lower than the last traded price of A$0.295/share before the company went into trading halt pending the share placement announcement. Settlement of the placement is scheduled for 27 May with allocation and issuing of the new shares expected on 30 May. The placement will increase the ordinary shares on issue by 9.86% to 190.15m shares.

Our forecasts are under review following the share placement and FY17 profit guidance.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

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