Investors have thrown their support behind GEO Limited which is systemising the businesses of busy tradies with its latest capital raise oversubscribed and doubling expectations.

New Zealand job management platform GEO Limited (NZX:GEO) has completed a bumper NZ$6 million capital raise to further proceed with growth plans.

GEO spent Thursday and Friday of last week in a trading halt as it finalised the capital raise, which attracted strong support from Australia and New Zealand investors.

GEO CEO Tim Molloy told Stockhead the company had been oversubscribed to its latest share offering from existing shareholders, new high net worth family offices, fund managers and institutions.

The latest capital raise was based on a Volume Weighted Average Price (VWAP) of NZ 13 cents, taken at 29th September.

“We set out to raise NZ$3 million but have been massively oversubscribed and raised NZ$6.1 million and will also do a special placement offer for another half a million to existing shareholders at our AGM on November 29,” Molloy said.

“We feel confident that the special placement offer will also be oversubscribed so we are really well capitalised for growth now.”

The share price was more than double from GEO’s last capital raise in December 2020 of NZ 6.5 cents a share where it raised just over NZ$2 million. Molloy puts down the capital raising successes to earning the trust of the investment community.

“We set a series of metrics for investors and the market and have achieved those including  a 23% annualised growth run rate, a lifetime value to cost of acquisition ratio of 3.2,” Molloy said.

“We are increasingly proving that we are growing and acquiring customers profitably to earn investor support.”

 

GEO treated like a start-up as company undergoes revival

While GEO was established more than a decade ago, since Molloy and CRO Scott Player took over the helm in February 2020, it has experienced exponential growth.

“Scott and I came into this business to turn it around which typically takes three phases including getting the business organised and understanding the market fit in detail,” he said.

“The second phase which we’re in now is to establish and then accelerate growth and to do that, we needed to go back to the market and get more capital.

“The third phase is optionality which is if you have a good quality shareholding and can deploy capital in a way that delivers good returns then investors will back you further for future growth.”

From plumbers, carpenters, concreters and electricians to cleaners, GEO is all about getting busy tradies and other home service businesses organised.

Growth has been predominantly centred on GEO’s next-generation app GeoNext that enables small and mid-size trade and home/field service businesses to manage quotes, schedule jobs to staff, track job completion, send invoices and get paid faster.

 

Could GEO be the next Xero success story?

While not accounting software, Molloy said GEO was much like fellow New Zealand success story Xero in the early days, getting small businesses away from pen and paper.

“The story was always that Xero was taking customers off MYOB but that was not the case in the early days,” Molloy said.

“What was actually happening was Xero was getting customers who were doing their invoicing or payrolls on pen and paper.”

He said many tradies and home-based businesses were still not systemised but as they grow, they need to become more organised.

“Think about the life-cycle of a tradie, typically they might have their partner at home organising jobs for them and doing the quoting,” he said.

“Jenny might ring Pete and say you need to go to a house and fix a leaking tap at 3.30 but that note will get dropped on the floor of the Hilux and Pete will forget, or as their business grows, there’s more jobs and tradies on the team to organise.”

He said GEO helps to manage quotes, and turn quotes into jobs with invoicing and scheduling.

“The tradie can do the job, take payment and then get on with the next job so it helps get them away from inefficient pen and paper,” he said.

Furthermore, GEO works in well with mainstream accounting software.

“We play really nicely with Xero, MYOB and Quickbooks so when you produce an invoice for example on our software, it goes into Xero automatically and the bank reconciliation happens inside Xero,” he said.

“When you do Timesheets inside GEO it submits it through Xero’s payroll package.”

 

Latest capital to accelerate growth

GEO CRO Scott Player told Stockhead the latest capital raise will go a long way in catapulting growth for the company.

New customer numbers were up 286% in H2 on pcp and up 87% on H1 FY21. New licence sales rose 174% in H2 on pcp.

“We’ve spent a lot of time understanding our market and being very personalised in the way we engage our potential customers as they come into our sales process,” Player said.

“We’ve got some solid metrics around understanding how much it costs per lead coming into the business and conversion rates which gives us a lot of confidence to increase our marketing spend, particularly on the digital channels. “

GEO plans to double its investment in customer acquisition marketing throughout FY22, in a bid to achieve its target of 30-40% top line growth.

“This additional capital allows us to be a little more aggressive in the customer acquisition front,” he said.

While the company had been focusing predominantly on Australasia, scaling up in other international markets such as the UK was now underway.

“We are starting to see some positive signs in attracting and converting our target market in the UK, which is three times the size of the Australian market,” he said.

“Whilst New Zealand and Australia remain our priority markets with still ample growth, we will start to deploy some of that capital into the UK, which is also ready for our software.”

This article was developed in collaboration with GEO, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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