Gophr restructure to boost profits at Auctus

By Trevor Hoey. Published at Mar 21, 2019, in ASX Biotechs

Auctus Alternative Investments Ltd (ASX:AVC) through its wholly owned subsidiary Yonder and Beyond Pty Ltd, has signed a binding Term Sheet to enable the restructure of Gophr Ltd, an initiative that should also better align Gophr management’s interests to the success of the business.

This is a crucial step in the realisation of value for Auctus shareholders as the group currently owns 75% of Gophr and has agreed via the Terms Sheet to sell 42.5% of Gophr to Sebastian Roberts and Krzysztof Worsa (management) for a combined £1.17 million.

The sale is to be completed via a vendor financed loan, repayable under certain “exit” and “leaver” events.

As a backdrop, Gophr provides swift delivery of parcels through its London courier service with an extensive fleet of bicycles, motorcycles and vans.

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The group has high profile customers such as Amazon, UK Mail and Marks & Spencer.

Gophr raising up to £500,000

In conjunction with the sell down, Gophr is currently in the process of raising up to £500,000 of new investor capital to assist its continued growth.

Gophr maintained its positive trajectory over the 2018 calendar year growing year-on-year revenue by nearly 140%.

It is expected that a further Series A round will be completed over the coming 6 to 12 months.

As a condition of the transaction, Auctus will adjust the current balance sheet debt it has in Gophr into a Convertible Note.

Potential profit of $4 million

The overall impact of the deconsolidation of Gophr is expected to be, subject to audit review and foreign exchange differences, a profit of approximately $4 million, while also resulting in a net asset improvement of more than $5.5 million.

The indicative illustrative financial results noted above are based on Auctus’ investment in Gophr being accounted for through an equity accounted investment post the transaction, rather than through consolidation of the results.

At completion of the proposed transaction it is anticipated that Auctus will retain an interest of approximately 29% in Gophr.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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