TZ Limited posts 40% rise in US sales, tops up cash with $3.45m raising

TZ Limited ASX TZL sales United States capital raise
TZ Limited’s sales in the US reached $7.75 million in the four months between 1 July and 30 October – up from $5.5 million during the same period in 2020.

After collaring $1.1 million in Australian contracts, TZ Limited (ASX: TZL) has noted a 40% increase in US sales and topped up its cash reserves with $3.45 million to extinguish debt and fund growth.

The company revealed its sales in the US were up 40% to $7.75 million for the four months between 1 July and 30 October this year.

This compares to $5.5 million during the same period in 2020.

In Australia, TZ has secured several contracts valued at about $1.1 million.

Capital raising to expel debt

To top up its cash reserves TZ received firm commitments to raise the $3.45 million via a placement to institutional, professional and sophisticated investors.

Under the placement 27.57 million shares were issued at $0.125 each.

The proceeds were designed to cover the company’s remaining debt and working capital expenses.

Since the start of the year, TZ has raised capital to paydown debt and remove interest costs which were amounting to about $1 million a year.

The debt has fallen from almost $12 million to $2.5 million. This capital raising will ensure the company will be debt free with capital to fund its organic growth.

Growth momentum

TZ pointed out it experiences a gap between ordering from suppliers and clients paying the deposits.

With global supply chains remaining tight, TZ is ensuring it has products at hand by pre-paying for its materials.

TZ is also investing cash into accelerated software development. The company pointed out its existing clients were requesting “additional functionalities”, which offers an opportunity to generate further annuity revenue moving forward.

As a result, the company has increased its software developers to deliver the upgrades and bring in extra income.

Broadening market scope

Last month, TZ revealed it was broadening its market and revenue avenues from a traditional smart lock hardware and technology business to a focus on cloud-based software and generating revenue from software as a service licences.

The new direction leverages TZ’s technology and capability to bring in the annual revenue through subscription and service fees as opposed to its previous reliance on uptake of its hardware which brought in “one time” only revenue payments upon fulfilment of its fit-outs.

Steering this new focus is chief executive officer Mario Vecchio who joined the company in September.

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