The Advantage Group, the once struggling Eftpos provider which is turning itself around with electronic commerce, continues its bull run with a $6.6 million capital injection from finance company Royal & SunAlliance.
A share placement of three million new shares priced at $1.65 each, and a further purchase of one million existing shares at the same price have given Royal & SunAlliance a 9.28% stake in Advantage Group.
The capital injection will be used to fund e-commerce acquisitions and initiatives, says Advantage CEO Greg Cross. "E-commerce now represents over 60% of Advantage's revenue [with Eftpos contributing 30%] and is tagged as the foundation for the company's future growth.
"We are assisting companies to move their bricks-and-mortar business online and to develop innovative Web-centric business models. Industry drivers include the growth in Internet usage and commercial presence, the introduction of value-adding services, 24x7 availability, unparalleled product selection and customer choice. They make e-commerce the fastest growing commercial sector worldwide," says Cross.
Advantage chairman Evan Christian says the acquisition is the first time, since the company restructured last year, that a leading financial institution has taken a position in Advantage Group.
"It reflects the feedback we have received about the market's growing confidence in the company's direction and performance, following our recent acquisitions programme and four quarters of profitable growth."
Royal & Sun Alliance's senior equity fund manager, Deepak Gupta, says: "We are positive about Advantage Group's performance and management, and [the] potential for sustained growth."
The announcement is the latest of several made this year, all of which have boosted Advantage's position. In May Advantage Group agreed to buy the major business interests of Computer Enhancements, a supplier of barcode-based scanning and portable data acquisition solutions. Last month it acquired the interests of PEC Retail Solutions, a supplier of retail automation software solutions to the global oil industry. A shareholders' meeting will be held on July 9 at Advantage's Auckland offices to confirm these acquisitions.
Cross says Advantage, whose 1999 financial year ended on June 30, expects to announce a profit of $3.1 million compared to a loss of $8.5 million last year.