Trimantium GrowthOps Limited (ASX:TGO) Managing Director, Phillip Kingston, discusses the company’s upcoming IPO, key markets and growth plans.
Jessica Amir: Hi I’m Jessica Amir for the Finance News Network. Joining me from soon-to-list business transformation services firm, Trimantium GrowthOps (ASX:TGO) is Managing Director, Phillip Kingston. Phillip, hi and welcome.
Phillip Kingston: Thank you.
Jessica Amir: First up Phillip, can you tell us about the business and why you’re so unique?
Phillip Kingston: Trimantium GrowthOps helps its clients create new products and services, to help them grow. What we’ve done is brought together eight profitable and growing businesses, to build an end-to-end operational partner for our clients. There is 15 entrepreneurs for hire to tackle business challenges facing CEOs and Boards in Australia. The problem that we’re solving is helping CEOs and Boards navigate foreign international companies coming in, and changing the competitive landscape.
Recently we’ve seen all of the retail stocks being very nervous about what Amazon’s (NASDAQ:AMZN) entry to the market, is going to do to their long-term share price.We’ve seen similar fear around Airbnb, Uber, Netflix (NASDAQ:NFLX) change the nature of local competition. So we’ve brought together three critical disciplines. Management consulting and change management, technology services and operations, and creative services and innovation, so that we can offer our clients an end-to-end operational growth partner.
Jessica Amir: You mentioned the convergence of management consulting, technology, advertising and creative,all changing the way businesses operate. But what other trends are you seeing in the industry?
Phillip Kingston: Probably the biggest trend right now is Cloud services. We’ve noticed very recently Salesforce (NYSE:CRM) announced its onshore data centre here in Australia, and that’s totally changed everything for that ecosystem. What that does for a services company like GrowthOps, it allows us to sell a whole new range of services to certain businesses and government departments, who really want onshore data. They want to know where their information is. So this tailwind and the rapid adoption of Cloud by governments and Australian businesses, creates huge opportunities for GrowthOps. When we advise our clients, they really want a single point of contact and accountability, all the way through the process.
Jessica Amir: Now to your IPO. Just tell us about how much you’re planning to raise and where you’re planning to put the funds?
Phillip Kingston: We’re raising $70 million, we plan to list in mid December. We’re using the capital in part to settle the cash component of the eight acquisitions that make up the GrowthOps platform. So that’s $48 million, $10 million is being used to acquire a Salesforce partner shortly after IPO. And the remainder is used for working capital and to fuel organic growth. So the market capitalisation should be between $140 million and $160 million.
Jessica Amir: And I understand it’s actually one of the biggest tech IPOs of this year. But how can people get involved?
Phillip Kingston: Go to growthops.com.au to download the prospectus, our lead manager is D2MX Pty Limited. So you can approach them, or you can go to your regular broker.
Jessica Amir: Turning to financials. Can you give us a snapshot of how the company’s tracking?
Phillip Kingston: So our revenue for FY17 was $53 million and we’re forecasting that to grow to $61.3 million, for FY18. That’s a growth of about 15.6 per cent. Our EBITDA we’re forecasting for FY18 $14.3 million, which is a growth of about 18 per cent over FY17. And our EBITDA margins are forecast for 23 per cent, for FY18.
Jessica Amir: Now to strategy, what are you looking to achieve and where do you see growth?
Phillip Kingston: Growth will come primarily from the revenue synergies of bringing these eight businesses together. The other growth is coming from the tailwinds of Cloud adoption, the globalisation of technology and all the sorts of rapid changes happening in the Australian marketplace, that GrowthOps can advise its clients on how to seize.
Jessica Amir: Last question now Phillip.What’s your focus for the next 12 months and longer-term?
Phillip Kingston: Our focus is to take these eight growing and profitable businesses, and put them together to make a strong end-to-end provider that helps our clients grow. To develop the new products and services that gives them the edge in the marketplace, and that’s a totally unique offering on the stock exchange. So we want to be the number one choice for any client in Australia, looking to grow and navigate the future.
Jessica Amir: Phillip Kingston, thank you so much for the introduction and good luck with the IPO.
Phillip Kingston: Thank you.