17th May 2019 09:46
LONDON (Alliance News) - Maistro PLC said Friday it intends to cancel its admission to trading on London's AIM market due to cost and "very poor" share liquidity.
Shares in Maistro plummeted 75% to just 0.30 pence in morning trade.
Maistro, an online business-to-business marketplace for corporate buying, will hold a general meeting where it will propose the cancellation of its shares followed by re-registration as a private limited company.
The company noted the "considerable financial cost" associated with maintaining its shares in AIM, which it said is "disproportionate to the benefits". Cancellation is expected to cut recurring administrative costs by more than GBP80,000 per annum.
Moreover, a recent review by the company found that liquidity in Maistro shares is "very poor, with relatively small trades having a large impact on the price of ordinary shares". The year-to-date average daily volume is just 647,677 shares.
"There has been very limited appetite for the company's shares in the last two years. Additionally, the directors believe that, following cancellation, early stage financial investors, who do not invest in public companies, may be more likely to invest in a future fundraise. This could lower dilution to existing investors, which in the context of expected future fundraises, could be a material benefit," the company said.
Maistro will publish a circular on Monday next week which will set out more details for the cancellation and contain a notice for the general meeting, which will take place on June 13. Shares are expected to continue to be admitted to AIM until cancellation, which is likely to be effective on June 28.
Thus far in 2019, revenue from Maistro's largest customer have been below what was forecast in the first quarter, although the company said its pipeline of opportunities is robust and it expects "a number of large UK corporates" will start sourcing services through its platform in the second and third quarters of the year.
"The board has implemented efficiencies in its cost structure to reflect the greater focus on domestic customers and it expects that the company has cash runway into 2020," Maistro said.
Looking ahead, the company predicts it will raise more capital "in the near future" to support business growth.