Sabien Technology (LON:SNT) has issued new shares to raise £770,000 which will support a new, more aggressive, roll-out strategy for its boiler efficiency product.
The company has to be bolder in its strategy, according to chief executive Alan O’Brien.
It will now waive fees for the initial pilot programmes, typically it charged £20,000 per programme, in order to speed up the full sales process.
“This new strategy is expected to reduce our sales cycle by up to 24 weeks by removing a significant barrier to clients agreeing to pilot programmes and to mark a step change in the rate of adoption of M2G by our target client base," O’Brien said.
Sabien, which is now targeting 35 installations of pilot projects in the 2016 financial year, highlighted a strong track record with pilot programmes. Since 2004, 87% of all pilots have resulted in sales, and 69% of pilots led to full estate-wide adoption of the technology.
Should the new bolder strategy prove successful it will represent a significant step-up, as it would compare to ten pilots in the 2015 financial year.
The share placing, which is relatively modest in size, received strong backing from new and existing shareholders. It was run by Westhouse Securities and sees 9.8mln new shares issued at 7p per share.
"I am delighted that we have received support from our new and existing shareholders to fund the new strategy for the provision of substantially more M2G pilot projects,” O’Brien added.
Sabien’s new bolder sales strategy comes after some of 2015’s orders were delayed.
Last month the company told investors it expected to report revenue of £1.9mln and a £600,000 loss for the financial year, ended June 30, as a result. The delayed orders were said to be substantial.
Nevertheless, the company highlighted a £6.2mln sales pipeline and said it has a £1.1mln cash position (prior to the placing) and is debt free.
The company aims to return to profitability by June 2018. It expects, based on its new ‘free’ pilot model, to substantially increase sales. It aims to build the sales pipeline to £25mln over a five year period, which would be expected to provide £8mln of annual turnover with a 25% earnings margin.