TZ Limited announced a rights issue to follow a heavily oversubscribed placement which closed on Tuesday, April 27.

The company raised $2.58 million from investors on Monday and Tuesday as it looks to partially pay down debts to major shareholder First Samuel Limited.

The recapitalisation comes amid a period of heightened interest in the business, which manufactures smart locks and locker banks, and the digital platform which operates them.

Last year, the business’ new management team restructured the company to cut costs and grow revenues, delivering shareholders a maiden profit in the first half of FY20.

Since then, CEO Scott Beeton has set about re-educating markets on TZ’s products and services, and the market opportunity TZ is targeting.

Last week, the company was placed into a trading halt by the ASX after the price surged 125% (from $0.16 to $0.36) in one day.

The price recommenced trading the following day closer to its original price. Shares in TZ were trading at 17 cents when the company went into a halt on Monday for the placement, which saw the company issue 21.5 m shares at 12 cents each (a 29.5% discount to last traded price).

The rights issue will also be supported by First Samuel, who will take up their full entitlement. Post the Rights Issue, the remaining debt to First Samuel (approximately $2 million) will be converted to equity.

Locked and loaded: Capital raise leaves TZ with growth warchest

TZ’s two rounds of capital raising will free up $1.1 million in interest cost per annum and allow the business to focus more aggressively on its growth plans at a time when demand for its services and products is growing.

In 2020, the company saw its sales pipeline roughly double as a five-year acceleration in ecommerce adoption forced businesses and universities to find new, contactless solutions for delivering products and parcels.

The number of parcels shipped and delivered in 2019 broke 100 billion for the first time in history, and pre-COVID estimates predicted that number would swell to 220 billion by 2026 – with outside forecasts even breaking past 300 billion.

TZ is looking to capture this growing market segment through its ready-made click-and-collect solution – locker banks which retailers and logistics companies can use to give consumers 24-hour access to their goods.

The global market for smart parcel lockers is expected to grow from US$644.7 million in 2019 to US$1,438.9 million by 2027.

Next Wednesday Reach Markets is hosting a special investor briefing with CEO Scott Beeton from TZ Limited (ASX:TZL). Click here to book.


This article was developed in collaboration with TZL, 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.