Balcatta-based braking systems manufacturer Safe Effect Technologies Ltd has raised $2.15 million in a placement ahead of a product range expansion and introduction of a new sales and marketing strategy.
Balcatta-based braking systems manufacturer Safe Effect Technologies Ltd has raised $2.15 million in a placement ahead of a product range expansion and introduction of a new sales and marketing strategy.
The company said in an announcement it would be bringing its sales and marketing functions in-house to allow a higher level of direct contact with customers, as well as maintaining its current pricing.
The funds raised, through a placement managed by Taylor Collison Ltd at 5.25c per share, will also be used for product development.
Advanced braking systems manufacturer, Safe Effect Technologies Ltd, today announced the completion of a $2.153 million capital raising to further expand its product range and to support a new sales and marketing strategy aimed at increasing the level of Company-initiated sales and direct involvement with customers.
The funds were raised through a share placement to institutional and sophisticated investors at 5.25 cents per share. The placement was supported by existing shareholders and also attracted new investors. The placement was managed by Taylor Collison Limited and supported by State One Securities. The pricing represents a 12.5% discount to the volume weighted average price of Safe Effect shares over the past month's trading.
Safe Effect's CEO, Mr Ken Johnsen, said he was pleased by the strong level support for the capital raising, with the funds raised providing the additional working capital required to underpin some important new initiatives for the Company as part of its ongoing rebuilding strategy.
Part of the funds raised will be allocated to support the implementation of a new sales model which will see the Company embark on a higher level of company-initiated sales and marketing to Australian customers for its patented Sealed Integrated Braking System product. The new model, to be introduced from 1 February 2007, will see Safe Effect engage in direct sales instead of through re-sellers under the current arrangement.
The CEO commented that "Bringing the sales and marketing functions in-house will enable us to maintain our current pricing to customers, while delivering improved profitability to the Company. It will also allow a higher level of direct contact with customers in order to aid their specialised braking needs."
To support the new sales model, Safe Effect will appoint regional sales staff on the east coast of Australia, who will take on the role previously fulfilled by re-seller, ADiT Engineering. ADiT will remain as an authorised service agent and installer of SIBS.
Mr Johnsen said funds raised would also be directed towards broadening the Company's product offering. "Part of the capital raised will be used to adapt the current, proven SIBS brake designed for the Toyota Landcruiser so it may also be used on other products such as Nissan and Mitsubishi 4WDs and light trucks," he said. "This is an important initiative in that it will broaden our product offering and potential market penetration."
The take-up of Safe Effect's patented braking system continues to gather momentum, both in Australia and overseas. The Company made sales of $250,000 to Canada in December 2006 and shipments to South Africa are anticipated to commence within the next month following the recent testing and approval of the braking system by the South African Bureau of Standards.
Mr Johnsen said the Company is targeting to reach break-even during this financial year and, if second half sales are strong, to deliver a maiden profit in 2006/07. The new initiatives announced today are expected to make an important contribution to achieving this goal.
"The new sales model should deliver a break-even sales point for Safe Effect at a substantially lower sales volume, and therefore improve the Company's prospect of achieving profitable operations in the coming months," he commented.
