Greater access to IPOs through OnMarket BookBuilds

State One has partnered with OnMarket BookBuilds to provide our clients with even more investment opportunities. In addition to the exclusive capital raisings that State One undertakes and offers to our clients, you can now take advantage of offers from OnMarket. Our association with OnMarket will allow you to bid directly on IPOs and have the shares allocated straight to your holdings at State One. Through OnMarket our clients will also be able to access free research, management interviews and get notifications on upcoming IPOs.

OnMarket is Australia’s first online platform that lets all investors buy shares in IPOs free of any fees other than the cost of the shares. Since launching in October 2015 OnMarket has hosted 1 in 3 ASX IPOs, so we are obviously excited to be able to offer our clients access to this cutting-edge platform. For each offer hosted by OnMarket you get easy bidding & payment, free independent research, and a chance to 'meet the management' via exclusive video interviews. Best of all, when you invest in IPOs via OnMarket, any shares you buy can be allocated directly to your State One Stockbroking account so you can manage your portfolio without disruption.

How does it work?

We will display the list of current offers from OnMarket on our website. If you see an offer that you want to invest in then click on the Bid Now button to apply for shares. You will leave State One website and be redirected to our partner's (OnMarket) bidding platform where you will need to sign up with your Holder Identification Number (HIN). If you have already signed up then you will be taken straight to the bidding page for the selected offer.

It is important that you enter your HIN correctly when you set up your login at OnMarket. This will make for a seamless experience if you want your shares to be automatically allocated to your State One account.

Current OnMarket Offers

IPO
Software & Services
$0.25
Size of Offer Up to $3.5 million
Minimum Bid $2,000.00
Opening Date 11/10/2018
Closing Date 25/01/2019

Update

AXS Group Ltd lodged a Supplementary Prospectus with ASIC on 17 December 2018 to reflect the material changes to the key terms for the acquisition of Axcess Consulting Group Pty Ltd. This was undertaken following feedback from ASX and revises the Offer structure and the Offer period. 

The revised terms of the offer include:

  • eliminate cash paid to the vendors of Axcess Consulting
  • the total consideration will ow be paid in AXS shares escrowed for 2 years
  • result in a reduced offer size of $3.0 - $3.5 million

​The Company has also received confirmation of commitments of over $2.5 million from institutional and/or sophisticated investors as at 17 December.

For more information, please read the Supplementary Prospectus and Key Market Update.

AXS remains positive on the group’s revenue outlook and the growth of its client base, as evidenced by the terms reached with Industrial Alliance in Canada as previously announced here.

Introduction

AXS Group Limited (ASX Code: AXS) is a global software provider of hosted, SaaS and cloud-based solutions to clients in the financial services and operates an end-to-end process architecture for clients in the wealth management sector.  The company has a track record of successfully tendering and integrating businesses into its ARMnet software with approximately over 75 third party systems integrations performed for clients with varying customised solutions found. The ARMnet platform uses cognitive processes, including robotic process automation and blockchain techniques to give real time output, reducing time and cutting costs.

AXS provides its clients with a digital transformation through its internally owned and developed software platform, ARMnet. The ARMnet platform is a customer relationship management (CRM) financial product management solution that is built on an industry standard Microsoft dot.net framework. It enables clients to improve business efficiency, productivity and accountability, while lowering the costs and risks in delivering different kinds of financial services solutions. 

On completion of the IPO, AXS Group will complete the acquisition of Axcess Consulting Group Pty Ltd the operating entity, which is a global integrated software solution provider to the finance, insurance and funds sectors and has grown organically and operated for over 13 years.

Offer overview

AXS Group Limited is looking to raise up to $3.5 million with an option to accept another $500,000 in oversubscriptions and will have an indicative market capitalisation of approximately $25.0 million at maximum subscription.

The proceeds of the offer will be used to:

  • expand the Group’s executive, sales and marketing teams;
  • provide Working capital; and
  • cover the costs of the offer

AXS client base

AXS provides clients software services for varying business sectors including a strong position in the non-bank software lending market. These clients are geographically spread across North America, Europe and Asia-Pacific region. The business is characterised by strong recurring revenue and high levels of client retention, being approximately 90% since inception. The ARMnet platform is currently used to manage over $100 billion of assets and transactions for clients worldwide.

Key Clients:

Revenue Model

AXS Group Limited revenues are generated by subscription and licensing, maintenance, personalisation and servicing fees, typically charged in accordance with agreed rates set out in service agreements with each respective client. Subscription and licencing revenues are recurring annuity revenue streams that contribute approximately 50% to total revenue.

The table below provides an overview of the types of fees charged by AXS.

Product Modules

Technological advances continue to develop in the back office which now offers the financial services industry the ability to do things more efficiently and cost effectively. The Company is to be a key driver in this market and from its ARMnet technology platform, operates two business lines: Platform Product Solutions and Service Solutions. The platform uses cognitive processes, including robotic process, automation and blockchain techniques to give real time output, reducing time and cutting costs.

AXS product offering is divided into 7 product modules on a subscription basis and 3 user services modules on the ARMnet platform. More modules will be introduced upon identification of further market opportunities with each based on pricing.

Industry Overview

The AXS Group currently focuses on providing its software platform solution to the wealth management industry, which involves businesses that provide investment services and financial advice, with the objective of supporting clients to grow their individual wealth. This includes business processing centres, mortgage providers, trustees, asset managers, family offices, private investor groups, public offer funds, and self-managed superannuation funds (SMSFs). As of June 2016, there were approximately 8,200 active businesses in Australia involved in financial asset investing, and approximately 4,000 superannuation funds (excluding SMSFs). There are almost 600,000 SMSFs, 1,500 charitable trusts that manage investments and over 25,000 active financial advisers.

AXS can be viewed as a provider of disruptive technology in the financial services sector, in which large companies, such as Fiserve and FIS Global, have traditionally dominated. Globally, total Information Technology (“IT”) expenditure is projected to total US$3.7 trillion in 2018, an increase of 4.5% from 2017. Corporate business software use continues to exhibit strong growth, with worldwide software spending projected to grow 9.5% in 2018, and it will grow another 8.4% in 2019 to total US$421 billion.1 Organisations are expected to increase spending on software in 2018, with more of the budget shifting to software as a service (“SaaS”).

Growth Strategy

AXS Group’s growth strategies include:

  • Organic expansion. The Group intends to grow the use of the ARMnet platform and its product and service lines through increased marketing and promotion and the education of existing or new customers by its sales managers.
  • Cross selling of products and services. The ability to acquire companies with leading software capabilities provides the group with the opportunity to cross sell software products across their expanded customer base.
  • Ongoing growth in funds management. Revenues can in some cases be linked to the size and volume of its clients’ underlying funds . In the event that AXS extends the nature of funds administration services beyond that currently offered, it will consider acquiring an AFSL to enable a further widening of its product administration offering.
  • Ongoing growth in superannuation in Australia. The Group believes it can leverage its ARMnet software expertise for super administration.
  • Expansion of operational footprint through acquisition. To accelerate the execution of the Group’s strategy and growth, the Group may make strategic acquisitions of specific software providers or other synergistic businesses.
  • Group business across the broader Asia Pacific, Canada and United States region. AXS will continue to broaden its service offering software solutions into third party administration and business processing centres. This shall include expansion, both domestically and offshore into Europe, Asia and North America.

Board and Management

The AXS Group is led by a well-credentialed and balanced Board and management team with experience in the financial services, information technology and software development industries. This includes:

  • Nick Brookes (Non-Executive Chairman), founder of CCSL Ltd and until recently was the Chairman of Linear Asset Management Ltd.
  • David Grey, Managing Director and CEO -  has over 30 years management, corporate and financial services experience and previously worked with Texas Instruments, AWA Limited, National Benefits Consulting, AM Corporation Ltd, Millinium Capital Group, AMP Superannuation Ltd, CUSCAL, Perpetual Trustees Australia Ltd and Australian Wealth Management Limited.
  • Ivan Colak, Executive Director - co-founder and director of Axcess Consulting with more than 30 years of domestic and global experience in technology services.
  • Andrew Duncan, Chief Financial Officer - is a Chartered Accountant with over 20 years’ experience specialising in forensic accounting, transaction services and was accepted by the Institute of Chartered Accountants as a Business Valuation Specialist. 

Risks

You are encouraged to read the Prospectus carefully as it contains detailed information about the Company and the Offer. Like all investments, an investment in the Company carries risk. As set out in Section 8 of the Prospectus, AXS Group Limited is subject to a range of risks, including but not limited to reliance on key personnel, risk of significant control by Existing Shareholders, replicability of business model or failure to retain existing clients and attract new clients.

 

Section 734(6) disclosure: The issuer of the securities is AXS Group Limited ACN 619 705 207. The securities to be issued are ordinary shares. The disclosure document for the offer can be obtained by clicking on the link above. The offers of the securities are made in, or accompanied by, a copy of the disclosure document. Investors should consider the disclosure document in deciding whether to acquire the securities. Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the disclosure document (which can be done via the electronic application form which will become available by clicking the bid button above).​

OnMarket has a limited allocation. The offer may close early and the 'Pay By' dates may change. Bids over $10,000 may be scaled back more heavily. Duplicate bids under the same investment profile, investor name or residential address may be cancelled.

IPO
Telecomm. Services
$0.25
Size of Offer $12 - 18 million
Minimum Bid $2,000.00
Opening Date 11/12/2018
Closing Date 31/01/2019

Update

The Company has advised that the Prospectus Exposure period has been extended, and no further applications can be made at this time.  More information will be provided in early January.

Introduction

Uniti Wireless Ltd (ASX: UWL) is a fixed wireless broadband provider with proven high speed performance with the potential to provide an alternative solution to the nbn™ on a national scale.  It is currently operational in suburban metropolitan Adelaide and areas of suburban Melbourne connecting residential, business and enterprise customer premises to its independent ‘last mile’ network. As a replacement for ADSL Internet and nbn™ services, it operates its network independently and does not rely on Telstra’s ADSL copper network or the nbn™ infrastructure to operate or reach its customers.

The Company has executed a share sale and purchase agreement to acquire FuzeNet.  FuzeNet was incepted in 2007 and operates the business of a retail service provider (RSP). FuzeNet’s major fibre access provider has an additional 90 buildings under construction for CY2019 – a 39% increase over the current building portfolio for their core product and further expanding the Uniti Wireless network/tower capability.

The combination of both businesses is highly complementary in that FuzeNet has access to over 200 on-net buildings (towers) – almost tripling the potential of the current Uniti network of 113 towers.

Investment Highlights

  • Firm commitments for $12 million minimum offer size received by lead manager Bell Potter
  • Fixed wireless broadband provider with proven high speed performance and large geographic footprint with the potential to provide an alternative to the nbn™ on a national scale
  • Targets nbn™ Fibre to the Node areas where 35% of premises are unable to access nbn™ services above 50 megabits
  • Over 6,000 existing residential and business customers in Adelaide and Melbourne
  • FuzeNet acquisition provides a further 18,000 customers and national footprint for future growth
  • Forecast FY2019 pro-forma revenues of $23.1 million and EBITDA of $2.0 million
  • Lead by telecommunications veterans Michael Simmons (CEO) and Graeme Barclay (Chairman). Michael was previously 26 years with TPG Telecom Ltd, CEO of Vocus Limited and Director of M2 Group Ltd

 

The figure below illustrates the core components of the network and network architecture

Offer overview

Uniti Wireless Ltd is looking to raise up to $18 million and will have an indicative market capitalisation of approximately $37.9 million at maximum subscription. The Offer is not underwritten, however, Bell Potter, as Lead Manager, has secured firm commitments from pre-Committed Investors to subscribe for $12 million.

The proceeds of the offer will be used for the following:

  • Acquisition of FuzeNet (including costs);
  • Fixed wireless network deployment across New South Wales, Queensland, Victoria and Western Australia;
  • provide sufficient growth and working capital; and
  • fund the costs associated with the Listing and the Offer;

Revenue Model

Revenue for Uniti Wireless comes primarily from the monthly fee charged to customers (ARPU), equipment sales to customers and set up fees (which under the new accounting standards adopted are recognised over the life of the customer).  Uniti Wireless has continued to grow customer numbers and increase revenue each year, with Compound Annual Revenue Growth of 127.5% from FY16 to FY18 and 112% for FY17 to FY18.

A summary of the combined pro-forma historical income statements is set out below:

Business Strategy

The key business strategies of the Group (including FuzeNet once acquired) include:

  • nationally expanding its broadband network through FuzeNet’s existing network footprint and RSP relationships with non-nbn™ fibre access networks;
  • increasing its customer base and pursuing small business, corporate, government and enterprise customers; and
  • following completion of the FuzeNet acquisition, transitioning the business to a telecommunications provider of both wireless and fibre access networks.

The figure below indicates the growth in Uniti Wireless towers following the FuzeNet acquisition.

Customer acquisition

In order to increase its customer base, Uniti Wireless deploys a number of customer acquisition strategies, including customer referral programs, online marketing, sales and PR initiatives and partnering with channel partners. These customer acquisition strategies have contributed to a growth in active customer services.

The breakdown of Uniti Wireless’ customers, as at September 2018, is provided below.

As shown in the figure below, at September 2018, the total number of active customer services had grown to 6,050 – an approx. 116% year-on-year increase. Over the 6 months to 30 September 2018, Uniti Wireless has added on average approximately 300 customers per month net of customer churn.

Geographic expansion

Geographic expansion into multiple regions and niche markets, coupled with an accelerated rapidly deployable low cost network, are key components of the Uniti Wireless national expansion strategy. Uniti Wireless has undertaken planning and analysis of potential roll-out locations in regions including New South Wales, Queensland and Western Australia.

The FuzeNet acquisition is an important contributor to the national expansion strategy for the reasons set out below:

  • allow Uniti Wireless to expand its product offerings to non-nbn™ fibre and nbn™-fibre access networks, as well as value added services on broadband and Internet connectivity access network deployments;
  • provide Uniti Wireless with access to FuzeNet’s national geographic reach to assist with the establishment of national coverage and increase the owned wireless network footprint for fixed wireless;
  • the acquisition is expected to increase profitability (as Uniti Wireless and FuzeNet combined have positive EBITDA), improve net operating cash flows, and contribute working capital to pursue the national expansion strategy.

Board and Management

Uniti Wireless has an experienced Board and executive management team with significant commercial, financial and listed company experience. This includes:

  • Graeme Barclay (Non-Executive Chairman), currently CEO of Axicom Group Holdings Pty Limited (previously known as Crown Castle Australia). He was formerly Group CEO of BAI Communications for 11 years, during which the business grew domestically and expanded internationally, and diversified into private networks and transit location telecommunications networks.
  • Michael Simmons (CEO), most recently Michael served as Group CEO of Vocus Limited (ASX:VOC) on an interim basis, and prior to this led the Enterprise, Wholesale and Government business unit of Vocus. Michael also held executive positions with TPG Telecom Limited (ASX: TPM) and was employed by TPG for in excess of 26 years.
  • Che Metcalfe (Co-Founder & CTO, Executive Director), prior to founding Uniti Wireless, Che founded several startups over the past two decades, including telecommunications platform Podmo, digital incubator Mega and mobile gaming company Kukan Studios.
  • Sasha Baranikow (Co-Founder & COO, Executive Director), prior to founding Uniti Wireless, Sasha was a fast growth commercialisation specialist who worked in a variety of media marketing and production roles over the past decade. At Imagination Games, Sasha opened new business markets with the launch of multiple products into major AU/NZ retail chains.

Risks

You are encouraged to read the Prospectus carefully as it contains detailed information about the Company and the Offer. Like all investments, an investment in the Company carries risk. As set out in Section 6 of the prospectus, Uniti Wireless Ltd is subject to a range of risks, including but not limited including a significant level of competition in the market, significant disruption or failure of the Company’s technological platforms, supply risk, and low customer take up of services and customer revenue.

 

 

Section 734(6) disclosure: The issuer of the securities is Uniti Wireless Ltd ACN 158 957 889. The securities to be issued are ordinary shares. The disclosure document for the offer can be obtained by clicking on the link above. The offers of the securities are made in, or accompanied by, a copy of the disclosure document. Investors should consider the disclosure document in deciding whether to acquire the securities. Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the disclosure document (which can be done via the electronic application form which will become available by clicking the bid button above).​

Exposure Period

OnMarket is accepting applications for the Uniti Wireless Ltd IPO during the Exposure Period.  Applications made prior to the completion of the Exposure Period may be withdrawn.  General applications received during the exposure period will not be conferred a preference over general applications received after the completion of the Exposure Period.  

If a replacement or supplementary prospectus is issued, this will be provided to you along with the opportunity to withdraw your application.

OnMarket has a limited allocation. The offer may close early and the 'Pay By' dates may change. Bids over $10,000 may be scaled back more heavily. Duplicate bids under the same investment profile, investor name or residential address may be cancelled.

Disclaimer: All information on this section is of a general nature. Before making any investment decision, please seek the relevant advice.

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