Likewise Group PLC (AIM:LIKE), the Birmingham-based flooring products specialist, on Thursday announced a £1.4 million equity injection.
Priced at the market, at 25p (Wednesday’s close), the even-money raise is something of a rarity in the small-cap market this year.
Indeed, the company noted that the raise was the result of a “reverse enquiry” from an existing institutional shareholder, Onward Opportunities Limited, which sought to increase its holding, but was unable to source sufficient stock in the secondary market.
Likewise chief executive Tony Brewer told investors that the injection of funds would be held in an investment account and not absorbed into working capital cycles.
“The board has taken the opportunity to create additional capital for the future development of the group,” Brewer said in a statement.
“As previously communicated, it is intended to fund the impending Newport extension from internal cash flow; however, the board is actively considering further initiatives to meaningfully increase the operational capability and enable sales revenue to exceed £250 million.”
Laurence Hulse, lead fund manager at Onward Opportunities, added: "Onward Opportunities first invested in Likewise a year ago at 14p into its nursery of holdings, having spotted some emerging competitive advantages, and that these were driving increased profitability and market share gains.
“This year, those advantages appear to be intensifying with associated revenue and profit gains in spite of a tough market backdrop, leading Onward Opportunities to increase its investment further into the company.”