Peters Investments has thrown further weight behind The Agency, converting $3 million of convertible notes to equity and exercising 14 million options in a show of support for the brand’s future plans.
Announced on the ASX yesterday, the move sees $3.121 million of debt and interest converted into shares, with Peters Investments now holding a 30.24 per cent stake The Agency.
The Agency’s balance sheet will be further enhanced by the initiative, with the exercise of options seeing the company enjoy a $391,656 cash injection, along with a significant reduction in debt.
Commenting on the note conversion and options exercise, The Agency Managing Director, Paul Niardone said Peters Investments had shown tangible support for The Agency, its strategy and long-term plans.
“Peters Investments has converted 50 per cent of his secured Convertible Notes to equity, providing the company with a stable and financial major shareholder to support the company on its continued growth,” Mr Niardone said.
The note conversion and options exercise comes on the back of strong half-year results for The Agency.
On January 22, the group announced record quarterly revenue, positive cashflow, and a growing sales pipeline into 2021.
Their half year results included:
- Unaudited EBITDA of A$1.6 million for HY21, $883k for the December quarter (excluding any Government incentives)
- Positive operational cash flow of $1.5 million for HY21
- Combined total group revenue of $29 million for HY21, up 15 per cent on the previous corresponding period ($25.2 million in HY20)
- Record quarterly combined GCI (gross commission income) of $21.5 million for December quarter, $38.1 million for HY21
- Strong growth across key operating metrics (recruitment numbers, properties sold, value of properties sold)
- Strong sales pipeline with 1209 listings for the December quarter
- Receipts from customers of $34.6 million for HY21 and $19 million for December quarter
- Cash and cash equivalents at 31 December, 2020 of $5.5 million
- Rent roll and mortgage book trail has an estimated market value of $27 million
“Peters Investments has seen our outstanding results and is backing the board, executive team and staff to continue this strong momentum,” Mr Niardone said.
“These conversions further enhance The Agency’s already strong balance sheet, through the conversion of $3 million of debt to equity.”
In the background, however, a war of words continues with Magnolia Equities, who last year sent a letter, but not a formal bid, proposing to purchase all of The Agency’s fully paid ordinary shares.
Responding to today’s news that Peters Investments had converted $3 million of debt into shares, Magnolia Founder and CIO Mitchell Atkins said his company’s proposal was still before the Takeovers Panel and the Federal Court and “we wait the outcome of their deliberation”.