Cleantech Carbonxt is fully funded to meet higher demand
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Special report: Carbonxt listed in January this year after raising $10 million to help build manufacturing facilities for a powdered Activated Carbon (AC) product that’s use in industrial air purification.
Since the listing, Carbonxt (ASX: CG1) has also extended its product line to include AC Pellets, which have a far wider application. They’re used in industrial applications such as the purification of potable water — a market estimated at $US155 million in North America alone by 2020 and $US540 million globally.
Carbonxt has now raised an extra $3 million allowing it to ramp up AC pellet production to meet higher demand from the US.
“Since we launched the new pellet product it’s been a key period for the company,” said Carbonxt managing director Warren Murphy.
“Our FY18 results showed revenue of $6.3 million, up 68% on the prior year. With the level of demand we are seeing for our new product we are anticipating continuing growth in FY19.”
The business has also been experiencing strong regulatory tailwinds in the US.
President Trump’s trade tariffs with China are making oversees products more expensive and creating a significant opportunity for local producers of activated carbon products.
Carbonxt has manufacturing operations throughout the US — including facilities in Wisconsin and Georgia — and is likely to add more capacity to meet demand.
The company has also launched a rights issue to raise up to a further approximately $3.5m, which will provide more capital to ramp up production to meet demand.
It’s not surprising when a small cap growth stock comes back to the market to raise more funds.
But it’s not often we see a company coming back for money to enable it to fill existing orders and meet a higher level of demand than expected.
“The continued demand from clients has led us to raise capital so we are able to meet the orders in our pipeline and the additional capital will allow us to do this and puts us in a strong position going into 2H19”, said chairman Matthew Quinn, a former managing director of Stockland.
The capital raise was led by Shaw and Partners and saw strong uptake from both its existing investors showing their support for the business, and a number of new institutional investors also joined the register.
Carbonxt is a Stockhead advertiser.