Harris Technology secures $5 million as it looks to the next phase of growth

The $5 million in placement secured today will be used by the company to accelerate its growth.

Pure-play e-commerce business Harris Technology (ASX:HT8) has just secured $5 million to fund its next phase of growth, following record sales in the third quarter of FY21.

The funds were raised through an oversubscribed placement to institutional and sophisticated investors.

The company has delivered exceptional results lately. Its latest Q3 FY21 sales were record breaking, producing $10.4 million in sales, a big increase from the $3.4 million in the same quarter last year. That also represented a 206 per cent year on year increase.

As a result, total unaudited revenue for year-to-date has also exceeded $30 million, a 300 per cent increase from the $7.48m million it achieved a year earlier.

Next phase of growth

HT8 says the funds will be used to accelerate its current growth strategy.

This includes setting up a new warehouse facility to support the expanding sales of its gaming and home appliance products.

The funds will also be used as working capital to increase its inventory, to meet significant increase in demand on its ecommerce channels.

As part of the growth strategy, the company is seeking to expand its product range into new categories – with discussions already underway with other gaming and home appliance brands.

The company will also use part of the funds to pay down debt on the balance sheet.

HT8 says that it was able to deliver record sales by pre-empting market trends.

“By identifying market trends and proactively working with vendor partners, we are able to consistently secure supply, and ensure healthy stock levels of the most in-demand products, capitalising on these commercial opportunities,” says Harris Technology CEO, Garrison Huang.

According to the company, the global gaming market is worth about US$162.3 billion in 2020, and is expected to grow to US$295.6 billion by 2026.

HT8 believes that the rise in online shopping that was initially brought upon by the global pandemic has not slowed down, but has in fact increased.

“This additional working capital will enable us to scale our buying power and turn over larger inventory volumes, resulting in total increased shareholder return over the coming months,” Huang said.

What’s next

As part of the placement, 40 million new shares will be issued at 12.5c per share.

The company has engaged Evolution Capital Advisors as the lead manager. A 6 per cent fee will be paid to the advisor in HT8 shares, or an equivalent of 2.4 million shares.

HT8 also has 400,000 options on issue to employees, exercisable by 24 June 2021, at an exercise price of 4c per share.

Harris Technology no longer operates any physical shopfronts – all businesses are now conducted online both at www.ht.com.au, and via the major online platforms such as Amazon, Kogan, Catch and eBay etc.

HT8’s share price has surged by 250 per cent in the last 12 months.

This article was developed in collaboration with Harris Technology, 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.