Change Financial Limited, focusing on its growth strategy

Team Veye | 02 Oct 2020 ASX - CCA
Change Financial Limited, focusing on its growth strategy

Change Financial Limited (ASX: CCA)

Completion of Strategic Acquisition

Change Financial Limited (ASX: CCA) (“Change” or the “Company”), on 1 October 2020 provided the following update on its strategic acquisition of Wirecard NZ and Australia.

Investment Highlights

  • Completion of the acquisition of Wirecard NZ & Australia assets
  • Pro-forma FY20 key financial metrics of the acquisition include:
  • $15.4 million revenue
  • $9.3 million is annual recurring revenue (ARR)
  • Acquisition brings significant scale and growth through the addition of 120 customers, capability in +35 countries and a global workforce
  • Blue chip client base including the big 4 Australian banks, major Australian supermarkets, Asian and South American banks and fintechs
  • Process of assigning customer contracts to Change underway
  • All required staff, including all senior Wirecard NZ and Australia staff, are now employed by Change as of 1 October 2020

(Chart source: TradingView)

Strategic Acquisition

Change has now completed the acquisition of the business assets (“Wirecard Business”) of Wirecard NZ Limited (administrators appointed) (“Wirecard NZ”) and Wirecard Australia Pty Ltd (administrators appointed) (“Wirecard Australia”) for a total cash consideration of A$7.8 million.

The Wirecard Business acquired by Change represents the Australian and New Zealand business assets of the vendors which provide innovative card management and payment platform solutions to banks and financial institutions as well as digital brands and fintechs. Wirecard Business’s technology is active across more than 35 countries, with over 120 customers.

Change Financial Limited ACN 150 762 351 - non-renounceable entitlement offer

On 11 September 2020, Change Financial Limited (Change or the Company) announced a non-renounceable entitlement offer to eligible shareholders, on the basis of 2 new fully paid ordinary shares for every 11 shares held at an issue price of $0.095 per share (New Share), to raise approximately $4.9 million before costs (Entitlement Offer). (Data Source – Company Reports)


Veye’s Take

Completion of the acquisition allows Change to accelerate and focus on its growth strategy. This includes upgrading of existing acquired customers to new card management software. Three customers have been identified to date with a further nine additional opportunities over the medium term. The change also noted that Wirecard customers had continued to use the products and continued to pay invoices during the administration process. The has given a strong green candle. It has broken its daily resistance with very good volumes. It is trading above 50 and 200 MAs on daily t/f. It can have the potential of growing very significantly if it manages to cross its monthly resistance at $0.20 where further buying could also be considered after seeing other parameters. The Latest "Buy" on Change Financial Limited” at the price of $0.067 was given on 11 May 2020 Oct 2019. It has grown excellently by more than 138% in less than five months till now. Veye maintains a "Hold" on “Change Financial Limited” at the current price of $0.16


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