Novatti (ASX:NOV) Announces $1 Million Strategic Investment to Accelerate Growth
Novatti Group Limited (ASX:NOV) has announced a significant capital raising milestone, securing a $1 million commitment from Australian Wealth Advisors Group Ltd (AWAG) via its subsidiary, Armytage Private. This investor update confirms a Novatti strategic investment designed to fuel the expansion of its payments business, building on the company’s recent return to positive operating cashflow and EBITDA profitability in Q1 FY26.
The investment from AWAG, an experienced firm established in 1995, serves as a strong vote of confidence in Novatti’s successful business turnaround and future direction. The funding provides immediate capital for growth initiatives and includes attached options, indicating AWAG’s potential for long-term partnership and belief in Novatti’s value proposition in the Australian payments sector.
What are the Details of the Share Placement?
This capital raising has been structured as a share placement with attaching options, offering a clear framework for the investment. The terms provide AWAG with an attractive entry point while adhering to ASX regulations.
Investment Structure and Terms:
| Component | Details |
|---|---|
| Total Initial Funding | $1,000,000 |
| Share Allocation | 36,363,636 fully paid ordinary shares |
| Issue Price | 2.75 cents per share |
| Free-Attaching Options | 18,181,818 options (exercise price 2.75 cents) |
| Option Expiry Date | 31 March 2026 |
| Potential Additional Capital | $500,000 (if all options are exercised) |
| Placement Pricing | Represents 80.2% of the 15-day VWAP |
The issue price of 2.75 cents per share satisfies the requirements of ASX Listing Rule 7.1A.3, as it is above 75% of the 15-day volume-weighted average price. Furthermore, the attaching options create an opportunity for Novatti to secure an additional $500,000 in funding before March 2026, providing further financial flexibility.
How Will Novatti Utilise the New Capital?
The funds from this Novatti strategic investment are earmarked specifically for the company’s Acquiring business. The primary objective is to replicate the success of the Issuing division, which has already reached EBITDA-positive status. This targeted deployment of capital highlights a disciplined approach to growth.
Capital Deployment Framework:
- Targeted Marketing Campaigns: Increasing marketing activities in specific vertical markets to drive customer acquisition.
- Sales Team Expansion: Strengthening the acquiring sales force to secure new merchant partnerships.
- Product Feature Development: Investing in product enhancements to maintain a competitive edge and meet merchant needs.
Novatti CEO Mark Healy commented on the 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.”
Why Did Australian Wealth Advisors Group Invest in Novatti?
Australian Wealth Advisors Group’s decision was based on a rigorous evaluation of Novatti’s market position, technology, and recent performance. AWAG’s Executive Chairman, Lee laFrate, confirmed their confidence in the company’s prospects and management team.
AWAG’s Investment Rationale:
- Proven Turnaround: Impressed by the successful execution of Novatti’s restructuring strategy.
- Strategic Technology: Acknowledges Novatti’s robust payments platform.
- Validated Growth: Positive financial momentum since Q4 FY25 provides a solid base for future expansion.
- Established Market Position: A long-standing operator in the evolving payments industry.
laFrate stated, “AWAG invests in businesses that meet a strict criterion, including holding strategic assets or technology and providing a genuine growth opportunity. 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. The funding is specifically to help stimulate growth within Novatti’s business in the immediate future.”
What is Novatti’s Growth Strategy and Recent Performance?
The timing of this investment follows a strong performance in Q1 FY26, which provided clear evidence of Novatti’s operational stability and readiness for growth. These financial results form the basis of the company’s strategy for payment business expansion.
Q1 FY26 Financial Achievements:
| Metric | Performance | Strategic Significance |
|---|---|---|
| Operating Cashflow | $0.2M positive | Marks the first instance of positive operational cash generation. |
| EBITDA | $0.1M positive | Confirms the company has reached profitability. |
| Available Cash Position | $3.6M (pre-investment) | Demonstrates improved financial resilience. |
| Group Margin Improvement | 100% increase | Shows the positive effects of revenue base reform. |
| AU/NZ Payments Margin | 50% | Highlights strong and sustained regional performance. |
These achievements confirm that the company’s turnaround phase is complete. The Novatti strategic investment of $1 million will increase the company’s available cash to $4.6 million, providing substantial resources to pursue its growth objectives in the payment acquiring sector.
What is the Timeline for this ASX Announcement?
Novatti has outlined a clear timeline for the implementation of the placement, ensuring capital is deployed efficiently to begin driving growth.
Implementation Timeline:
| Milestone | Timeframe | Outcome |
|---|---|---|
| Share Issuance to AWAG | Within 7 days | $1,000,000 in immediate capital received. |
| Growth Initiative Deployment | Immediate | Funds allocated to marketing, sales, and product development. |
| Shareholder Approval (Options) | As soon as practicable | Required for the issuance of the attaching options. |
| Option Exercise Window | By 31 March 2026 | Potential for an additional $500,000 in capital. |
This structured placement provides Novatti with the necessary capital to focus on scaling its Acquiring business, with the goal of achieving profitability in that division and delivering further value to its shareholders.
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