Group Newsagency Supplies (GNS) has announced details of a new share offer, aimed at raising around $7 million to repay debt and expand its market base.
GNS CEO Alex Stewart told Stationery News that the funds raised will be used to:
• Repay debt in order to reduce interest charges and permit GNS to compete more effectively as a supplier of stationery and office supplies; and
• Provide general working capital for other business initiatives including the possibility of business acquisitions enabling GNS to expand its market base and sales revenue, or to introduce new product offerings, marketing solutions, e-commerce platforms and improved use of technologies available to improve the customer engagement models through its area manager network.
Stewart also said that GNS directors believe that increasing the number of shareholders will show support for the role that GNS plays in the industry and strengthen the protection that is currently in place from hostile takeovers.
Under the offer, GNS will issue up to 2,563,229 redeemable ordinary shares at $2.71 a share to raise up to $6,946,351 before the expenses, which are expected to be approximately $30,000. The minimum number of shares that can be purchased is 1000 and the offer closes on June 30, 2013.
In 2010, GNS shares were valued at $2.10.
Under the GNS constitution, shares can only be held by owners of newsagencies or stationery reseller/retailer businesses that are not in competition to GNS. GNS currently has just over 5000 customers but only 505 of those are shareholders.
In the year ended June 30, 2012, GNS's trading trust had revenues of around $107 million and earnings before interest, amortisation and depreciation of $4.4 million. GNS has “substantial” investments in commercial properties, namely the five warehouses it operates in New South Wales, Victoria, Queensland and Western Australia.
GNS started as wholesaler of office products and stationery and is now a wholesaler of giftware, confectionery, canteen suppliers, IT consumables, newsagent business supplies and associated products, to the newsagents and commercial office products reseller channels.
In a statement to GNS members, Stewart said: “I do believe that our business is changing for the better – both within our own internal culture and processes, but more importantly what and how we position ourselves to our customers. The business has a great foundation that we can build from and opportunities exist – despite the many and real challenges that face our industry now and in the future.”
