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IMImobile raises ?22m in pre-emptive strike to counter Covid-19 impact

By Iain Gilbert

Date: Thursday 09 Apr 2020

IMImobile raises ?22m in pre-emptive strike to counter Covid-19 impact

(Sharecast News) - Cloud software provider IMImobile said it had raised ?22m in a pre-emptive move to counter any financial impact from the Covid-19 pandemic.
The company earlier on Thursday said it wanted to raise at least ?15m. The placing of a 10% stake was completed at 300p a share, an 8.4% discount to Wednesday's close, raising gross proceeds of ?22.2m.

IMImobile said it had modelled scenarios on revenue impact, duration and periods of recovery reflecting a range of gross profit for 2021 of between ?90m and a "prudent" downside scenario of ?70m against ?79m in 2020.

The board decided to "to provide maximum financial flexibility to the group" and take proactive action to maintain flexibility to allow the group to capitalise on future opportunities and stay within its banking covenants.

In a statement, IMImobile forecast higher full year profits but warned of an uncertain short term outlook as it imposed temporary wage cuts and a hiring freeze to counter the impact of the pandemic. The company added that the board had taken a 33% pay cut, while employees have been furloughed and a hiring freeze has been imposed.

Full-year revenues were forecast to rise by at least 17% year-on-year to ?167m, while gross profit was expected to be up 26% at ?79m. Adjusted underlying earnings were projected to rise 20% to ?21m.

"Whilst there has been little impact to date, the board appreciates the global severity of the pandemic and associated prevention measures, making the short-term outlook significantly more uncertain with its ultimate effect on the business and end customers yet to materialise," the company said.

On the operational front, IMImobile said it had experienced growth across all sectors and regions for cloud communication platform, products and services - with particularly strong momentum in North America after having signed a "significant" new client.

IMImobile added that it had net debt of ?22.3m at the end of March, with gross cash converted from operations of over 90%.

(Writing by Frank Prenesti; Editing by Michele Maatouk)

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