Novatti Group (ASX: NOV) Announces $1 Million Strategic Investment to Fuel Growth

Novatti Group Limited (ASX: NOV) has announced a significant development in its corporate trajectory, securing a $1 million strategic investment from Australian Wealth Advisors Group Ltd (AWAG) and its subsidiary Armytage Private. This Novatti Strategic Investment Growth initiative validates the payments company’s successful turnaround and positions the business for accelerated expansion across its Acquiring division. The funding arrives through a share placement of 36.4 million shares at 2.75 cents per share, complemented by 18.2 million free-attaching options that could generate an additional $500,000 by 31 March 2026.

This strategic capital injection follows impressive Q1 FY26 financial results that demonstrated Novatti’s effective pivot back to growth after implementing extensive operational reforms. The company achieved positive operating cashflow of $0.2 million and positive EBITDA of $0.1 million, whilst simultaneously increasing its available cash position to $3.6 million—representing a $1 million increase from the previous quarter. Furthermore, the Group margin expanded by 100% after revenue base reforms, with AU/NZ payments margins reaching 50% and continuing their upward trajectory.

CEO Mark Healy emphasised the significance of this partnership, stating: “We are delighted to have AWAG join Novatti as a strategic investor. Their investment of $1m will not only support the implementation of Novatti’s pivot back to growth, it will also see Novatti benefit from leveraging their deep expertise and ecosystem connections.”

The investment specifically targets accelerating growth within Novatti’s Acquiring business, with funds allocated towards increased marketing in targeted verticals, bolstering sales teams, and enhancing product features across its suite of payment platforms.

How Will the Strategic Investment Accelerate Novatti’s Growth Strategy?

The Novatti Strategic Investment Growth plan centres on replicating the success of its EBITDA-positive Issuing business within the Acquiring division. The $1 million investment will be strategically deployed across three interconnected areas designed to capture emerging market opportunities and strengthen competitive positioning.

Targeted Marketing Expansion represents the first pillar of growth acceleration. Novatti will increase marketing expenditure in high-potential vertical markets where its payment solutions demonstrate competitive advantages. This focused approach leverages AWAG’s ecosystem connections for enhanced market access, concentrating resources on sectors with proven demand for integrated payment solutions. The strategy moves away from broad-based marketing towards precision targeting of industries where Novatti’s technology delivers measurable value.

Sales Team Enhancement forms the second critical component. A significant portion of funding will bolster acquiring sales capabilities to capitalise on market opportunities identified through enhanced marketing efforts. This includes expanding business development teams in key geographic regions, implementing advanced CRM systems, and deploying sales automation tools to improve conversion rates. The investment acknowledges that identifying opportunities requires adequate resources to convert interest into active customer relationships.

Product Development Acceleration completes the strategic framework. Remaining funds will drive feature enhancements across Novatti’s suite of payment platforms, improving integration capabilities for fintech and corporate clients whilst advancing digital finance functionalities to maintain competitive differentiation. These improvements respond directly to customer feedback and emerging market requirements, ensuring the platform evolves alongside industry demands.

Investment Allocation Framework:

The share issue price of 2.75 cents represents 80.2% of the 15-day VWAP, meeting ASX listing rule 7.1A.3 requirements by exceeding the 75% threshold. Shares will be issued within seven days under existing placement capacity, ranking equally with current Novatti fully paid ordinary shares on issue.

What Strategic Value Does AWAG Bring Beyond Capital?

The partnership with Australian Wealth Advisors Group extends substantially beyond financial injection, providing value through industry expertise, established market connections, and third-party validation of Novatti’s turnaround achievements. AWAG’s investment philosophy focuses on companies with strategic assets, proven technology, and genuine growth opportunities, making this Novatti Strategic Investment Growth arrangement a carefully considered portfolio addition.

AWAG Executive Chairman Lee laFrate explained the investment rationale: “AWAG invests in businesses that meet a strict criterion, including holding strategic assets or technology and providing a genuine growth opportunity. With this in mind, we have been tracking Novatti for some time. We have been impressed by the deep commitment to implementing their turnaround strategy and their successful pivot back to growth.”

Armytage Private, established in Melbourne in 1995, operates multiple Australian equity-focused investment funds with decades of market experience. This heritage provides Novatti with access to deep financial services knowledge, established business relationships across multiple sectors, and insights from experienced investment professionals who understand market dynamics intimately.

Strategic Partnership Benefits Include:

• Access to AWAG’s extensive financial services expertise and market intelligence
• Leveraging Armytage Private’s established business relationships built over three decades
• Targeted funding enabling immediate market expansion initiatives
• Independent validation of turnaround success from respected investment professionals
• Potential network introductions to corporate partners and growth opportunities

The partnership structure aligns investor and company interests through the free-attaching options mechanism. These 18.2 million options, exercisable at 2.75 cents by 31 March 2026, create direct incentives for AWAG to support initiatives that drive share price appreciation. If exercised, these options would inject an additional $500,000 into Novatti’s growth funding whilst simultaneously validating market confidence in the company’s trajectory.

Why Are Novatti’s Payment Platform Margins Significant for Investors?

Payment platform margins represent the percentage of revenue retained after direct transaction costs, serving as a critical indicator of operational efficiency, competitive positioning, and scalability potential. Novatti’s achievement of 50% margins in AU/NZ payments signals robust operational performance and pricing power within intensely competitive markets.

The 100% increase in Group margin following revenue base reforms demonstrates Novatti’s capacity to optimise operations whilst scaling business activities. This margin expansion, combined with positive EBITDA achievement, validates the effectiveness of the turnaround strategy and provides financial flexibility to invest in growth initiatives without affecting profitability.

Understanding Key Performance Metrics:

• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) measures operational profitability excluding non-operating expenses.
• Operating Cashflow represents cash generated from core business operations, excluding financing and investment activities.
• Acquiring Business encompasses payment processing services provided to merchants and retailers.
• Issuing Business includes payment card and digital wallet services for consumers and businesses.
• VWAP (Volume Weighted Average Price) serves as a stock trading benchmark considering both price and volume.

High payment margins indicate several positive business characteristics. Operational efficiency demonstrates lower processing costs per transaction through technological advantages or operational excellence. Competitive moat reflects the ability to maintain pricing despite market pressure, suggesting differentiated value propositions that customers recognise and pay for. These margins also indicate scalability potential, as higher margins support rapid growth investments without sacrificing profitability or requiring constant capital injections.

The payments industry typically operates on relatively thin margins, making Novatti’s 50% margins particularly significant. This performance suggests the company has successfully positioned itself in higher-value market segments, implemented efficient processing technologies, or developed customer relationships that recognise premium value. Furthermore, the continuing upward trajectory indicates sustainable competitive advantages rather than temporary market conditions.

What Are Novatti’s Immediate Execution Plans Following This Investment?

Following the Novatti Strategic Investment Growth announcement, the company has outlined clear implementation steps with specific timelines and measurable objectives for accelerating payment platform operations across its target markets.

Immediate Actions (Next 90 Days):

1. Share Issuance Completion: 36.4 million shares to be issued within seven days under existing ASX listing rule 7.1A placement capacity, providing immediate capital access.
2. Shareholder Approval Process: Options issuance approval sought under ASX listing rule 7.1 as soon as practicable, ensuring governance compliance.
3. Marketing Campaign Launch: Increased spending deployment in targeted vertical markets identified through strategic analysis.
4. Team Expansion Initiation: Acquiring business sales staff additions commence to capture emerging market opportunities.

The company will seek shareholder approval for options issuance under ASX listing rule 7.1 at the earliest practicable date, ensuring transparent governance whilst maintaining momentum on growth initiatives. This structured approach balances regulatory compliance with operational urgency, preventing delays in implementing critical growth strategies.

Medium-Term Objectives (6-12 Months):

• Revenue Growth Acceleration: Expanding Acquiring business performance to match the Issuing division’s success, which already operates at a positive EBITDA.
• Market Penetration: Utilising AWAG’s network to enter new vertical markets and secure larger enterprise clients.
• Product Roadmap Execution: Delivering on planned platform enhancements to increase customer retention and attract new business.

This investment and partnership with AWAG marks a new phase for Novatti Group. The capital injection provides the necessary resources for accelerated growth in its Acquiring division, whilst the endorsement from an experienced investor like AWAG validates the company’s recent operational turnaround. Investors will be monitoring Novatti’s execution on its stated objectives over the coming quarters as it seeks to build on its recent positive financial results.

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