CropLogic cuts ties with NZ; burns through cash
Food & Agriculture
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AgTech play CropLogic is moving its HQ from New Zealand to Australia and slashing its Kiwi R&D program just months after listing on the ASX.
NSW, Victoria and Tasmania are in the running as HQ locations, following CropLogic’s purchase of small Tasmanian agronomy service Ag Logic.
New Zealander Jamie Cairns resigned as managing director last week. A company spokesman told Stockhead Mr Cairns preferred not to move to Australia.
CropLogic (ASX:CLI) is moving the bulk of R&D out of New Zealand and into countries that are “key revenue targets”, such as Australia and the US.
“The Research and Development component of the group’s in-house team will also be reduced,” CropLogic told investors.
Until now the company retained an in-house R&D team in New Zealand, where soil-monitoring technology was developed.
CropLogic spent $1.2 million on R&D in the March quarter — a major contributor to the accompanying $2 million operating cash burn — along with a large spend on manufacturing.
It raised $8 million via an Initial Public Offer in September and seems to have burned through $5 million of that — leaving $2.9 milllion in the kitty at the end of March.
The company is also switching to a direct sales and partnerships model.
It launched with a “growth via acquisitions” strategy which did not curry favour with analysts Stockhead spoke to after the IPO.
CropLogic has struggled to gain traction on the ASX after dumping 15 per cent of its value in September when it debuted at 20c. It fell to a 52-week low of 4.2c in March and has since recovered to 5.8c on Monday.
The company has cut the managing director role and appointed ex-CFO James Cooper-Jones as interim CEO and fellow Australian Daniel Bramich from Bourke Group as CFO.
This is Mr Cooper-Jones’ first ASX directorship. Before now he has held company secretary and CFO roles at a variety of public and private companies.
Former Western Australia attorney general Cheryl Edwardes became chair in March, and is credited as having a strong hand in the change of direction.
CropLogic made only $98,000 in the March quarter in customer receipts. It reported $2.1 million in revenue in the six months to September 30, 2017.