Registry Direct plans to take on Computershare
Registry Direct is planning to raise up to $6 million to develop new software features, expand sales capabilities and pay for general overheads.
Registry Direct is planning to raise up to $6 million to list on the ASX in an attempt to 'disrupt' the share register service industry.
There are about 2.5 million registered companies in Australia and less than 0.1% per cent are publicly listed on the ASX or on any of the smaller stock exchanges. All listed companies – but also many of the unlisted companies – consist of several shareholders and must somehow keep record of their securities register.
Depending on the size of the company these so called ‘share registry services’ are often outsourced. The market in Australia is dominated by Computershare and Link Market Services, together controlling over 60% of the market. The third provider is Boardroom with has been growing its market share in recent years.
Such a duopoly market structure often results in high barriers to entry, pricing power and little innovation. But it also creates opportunity for small providers to disrupt the industry.
The coming listing of Registry Direct offers investors the chance to invest in an early-stage company that plans to eat into the market share of the ‘big three’ but also targets a part of the market that was neglected so far.
The company is banking on its own proprietary and cloud-based technology, which it claims to be a cost-effective and user friendly ‘self-service’ tool allowing companies to better manage shareholder engagement. Targeting both listed but also unlisted public companies, management believes the latter is an “underserviced segment”.
Registry Direct is planning to raise up to $6 million to develop new software features, expand sales capabilities and pay for general overheads. Managing Director and CEO Steuart Roe will be the largest shareholder, holding between 48% and 60% depending on the outcome of the raising.
During the financial year 2017 the company generated just $650k in revenues, with its top two clients contributing nearly 65%. The float appears speculative and somewhat premature, but the management team is experienced and understands an industry that is plagued by legacy systems and a lack of innovation.
Registry Direct Limited
ASX Code: RD1
Shares on Offer: 30m
Listing Price: $0.20
Market Capitalisation: $20.6m
Listing Date: TBC
Author: Simon Herrmann
Oct 18, 2017
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.