30th Jul 2019 12:47
(Alliance News) - Entertainment company Immotion Group PLC said on Tuesday that it successfully raised GBP2.0 million through a share placing in order to fund a new virtual reality strategy.
Immotion placed 29.6 million shares at a price of 6.75 pence each. The company has also authorised a broker option which allows joint brokers WH Ireland Ltd and Alvarium Capital Partners to raise an extra GBP500,000 through the issue of 7.4 million additional shares at the same price.
The placing represents a 14% discount to Immotion's closing price of 7.85p on Monday.
Shares in Immotion were down 16% at 6.602 pence each in London on Tuesday afternoon.
The shares from the placing and broker option represent 11% of the company's issued share capital.
The roll-out of the company's partnership model allows Immotion to install its virtual reality products in "high footfall leisure destinations" like London's O2 and Glasgow's Soar Centre, it said.
Immotion said this new strategy will help the company build a "recurring revenue stream" and allow the group to reach breakeven earnings before interest, tax, depreciation and amortisation.
The company said it will break even once 410 headsets are installed, and Immotion expects this to happen in the first quarter of the 2020 financial year. Immotion did, however, concede it expects lower revenue in the 2019 financial year as a result of the new strategy.
Chief Executive Martin Higginson said: "Creating a partnership solution where we work together with high footfall leisure locations to provide them with not only a new and interesting attraction, but also a valuable ancillary revenue stream has transformed our business.
"Our continued focus in creating not only the right environment as well as VR experience for our partner, is starting to show encouraging signs with revenues in our partner estate growing strongly."
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