FoodWorks internal capital raising exceeds $10m
FoodWorks, announced that the Company had successfully completed an internal capital raising that exceeded its ambitious target of $10m.
In 2005 FoodWorks embarked upon a series of growth strategies to capture a large share of the Australian supermarket retail industry.
Currently, FoodWorks has 710 stores, spanning seven states and territories nationally with over $1.35bn in annual sales at the retail level, and the successful capital raising will enable further growth opportunities to be even more rapidly pursued.
According to FoodWorks, it is delighted with the level of faith and trust that members had shown in the Company, represented in their tangible, financial endorsement which backs up their verbal support, feedback and counsel throughout various forums over the past two years.
The level of support provided the confidence to conduct the capital raising, given the capital raising was not underwritten.
In restructuring the FoodWorks Group, they have just gone from being a company showing a bottom line of zero dollars to one that will have a balance sheet in excess of $10m.
The investment and the new share structure completes the significant phase of the Company’s transformation so far and positions them to take advantage of numerous growth opportunities that they have identified in the market.
In combination with ongoing counsel from FoodWorks shareholders, their retail members, leading up to the lodgment of a Prospectus, the Company conducted a comprehensive legal review, and accounting and financial auditing process, with DLA Philips Fox and Pitcher Partners respectively, with SLM Corporate Ltd assessing risk, providing advice and direction for the restructure and capital raising.
They conducted an extensive assessment of the options available to FoodWorks to raise capital, and worked closely with the FoodWorks Board, and internal and external specialists to formulate, and then implement, the project.
The result provides an excellent platform for FoodWorks for its further growth.
The total capital raised from around 170 FoodWorks retail members and their related parties equates to approximately $10.4m, which is represented by both upfront payments and installment payments that will be progressively received by the Company in the coming two years.
The funds raised will be invested in five key growth related initiatives in the areas of property, people, products and services and branding.
These initiatives include store development programs, brand building, creating a differentiated merchandise offer featuring new private label products, back office systems and innovative generation retailer development programs targeted at attracting fresh, new entrepreneurs to independent supermarket retailing.
Providing a FoodWorks retailer member’s perspective, Allan Burge, storeowner and manager of FoodWorks Loganholme in Queensland, who has been in the supermarket retail industry for nearly 40 years, said that he was happy to invest in the future of his Company.
He is confident that the fruits of the capital contributions will become evident in the near to mid term through the acceleration of the growth and reach of the FoodWorks brand.
He would not be surprised if we soon see competitors lining up, wanting to be a part of the FoodWorks Group.
21-Jun-2007