IT company Sirma Group Holding seeks to raise BGN 39.6m in a capital increase, the Company announced in a regulatory filing to the Bulgarian Stock Exchange. In order to do so, Sirma will issue rights to all of its existing shareholders in the ratio of 1 right for every ordinary share held. The rights could be exercised in the ratio of 1.5 rights for every new ordinary share. As a result, Sirma will seek the placement of 39.6 million new shares at both a nominal value and issue price of BGN 1.00. The last close of Sirma’s stock was at BGN 0.97, which is below its nominal value of BGN 1.00.
The capital increase will be successful if c.19.8 million shares are placed (50% of the placement). In case of a full subscription, the Company will increase its capital from 59.4 million to 99 million shares.
The purpose of the capital increase
Sirma will use the proceeds from the capital raise to fund:
- its Strategy 2022 targeting the development of its product portfolio
- the implementation of its corporate structure reorganization
- the marketing and sale of its product portfolio, including commercialization of new product
No dividend in 2018
The Company also announced that it would hold a General Shareholders Meeting on 25th June, 2018. According to the preliminary agenda no dividend is proposed this year out FY2017 BGN 2.8m net profit.
Excellent 2017 results
The implementation of the renewed strategy of Sirma Group gives its first results – this was the introduction of company’s financial results of 2017. The earnings per share of Sirma Group Holding increased by 68.71% in 2017. The excellent results achieved in 2017 contribute to the implementation of the Strategy for Development and Growth of Sirma Group Holding and the objectives set in the strategy.
The total value of the consolidated revenue for the year 2017 is BGN 52.036 million, which is 25.14% more than the revenue in 2016. EBITDA posted an increase of 23.66% compared with 2016, reaching BGN 15.363 million. As a result, Sirma Group Holding posted a 68.71% growth in consolidated net profit on an annual basis in 2017, which amounted to BGN 6.190 million. Return on Equity (ROE) also increased significantly, recording a growth of 58.61% compared to the previous year and reached 5.93% in 2017. The net profit margin posted a significant increase of 34.82% reaching 11.90% in 2017. This led to an increase in Sima Group Holding’s earnings per share (EPS) from BGN 0.0618 in 2016 to BGN 0.1043 in 2017 or a growth of 68.71%.
The main markets for the Group’s products, services and solutions are Bulgaria, Europe and North America. The largest increase in sales revenue in 2017 from 165% was achieved in the UK.