UPDATE: Minnow GeoOp eyes NZX main board
GeoOp [NZAX: GEO], the workforce management app, is looking to migrate from the New Zealand Alternative Index to the NZX main board.
The Auckland-based company plans to apply to the stock exchange operator to graduate from the minnow bourse to the main board, it said in a statement. GeoOp shares jumped 18% to a month high of 47c, on turnover of $12,000 and at a fraction of its September 2013 peak of $4.49 and less than half its $1 listing price in October 2013.
"The company has been a very disappointing performer on the market since it listed and there's not a lot of investor interest in the stock," said Grant Williamson, director at Hamilton Hindin Greene. "That can certainly grow over time if it can turn around its performance but the move from one board to another for a small cap stock like this won't have too much effect – certainly in the immediate future anyway."
GeoOp is foregoing profits and dividends as it invests in product development and chases customers. The company is counting on capturing market share through the growing use of smart phones, where its app can be used by small and medium sized enterprises to manage their workforces.
Today's share price gain values GeoOp at $12.9 million, making it the 10th largest stock of 20 listed companies on the NZAX , which is being replaced by the NXT small cap momentum stocks market that NZX is developing. A move to the main board would make it the 12th smallest out of 127 companies, in between NZ Windfarms and Moa Group.
"Unless it is going to grow very quickly, it is probably not the best candidate to be on the main board," Mr Williamson said. "Should a company that size be on the main board of the market?"
The nascent NXT market targets small-to-medium sized enterprises with a less onerous disclosure regime and lower listing costs. Currently G3 Group, a mail services business, is the only listing on NXT, which launched last month and is intended to replace the alternative index, forcing all NZAX-listed firms to consider their future listing platform.
Mr Williamson said a move to the main board might see wider investor attention for the stock but the underlying performance of GeoOp was what counted.
GeoOp, which is in the middle of shifting its balance date to June 30 from March 31, said its loss increased to $4.87 million in the 12 months ended March 31, from a loss of $4.59 million the year earlier. Today it reported a 72% increase in annualised revenue to $1.4 million at June 30, from a year earlier.
In May the company flagged it was considering options for a capital raising, and today said "no firm amount or structure has yet been determined, the board expects to update shareholders in due course." At March 31, the company had $2.5 million in cash and short-term deposits, down from $4.5 million a year earlier. The company raised $10 million at $1 a share in a private offer before listing on the NZAX in October 2013.
GeoOp didn't respond to BusinessDesk inquiries.
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