Medical imaging services specialist IXICO Plc (LON:IXI) is proposing to raise £5.5mln through a placing of shares at 28p a pop.
The £9mln-valued company said the placing has received support from existing and new institutional shareholders.
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In total, 19.64mln shares will be placed, representing 42% of the enlarged share capital of the company.
The funds raised will enable the company to scale-up its operations and expand its market presence, including an operational and commercial presence in the US.
The company will release half-year results on May 23 but gave a sneak preview, saying that revenues in the six months to the end of March rose 26% from the year before to £2.9mln, despite unhelpful exchange rate movements.
The half-year gross margin will be slightly ahead of the 61% reported in the same period a year earlier while the loss before interest, tax, depreciation and amortisation (Lbitda) will show an improvement from the Lbitda of £400,000 in the first half of fiscal 2017.
The company ended March with a positive cash balance of £2.7mln.
"We are delighted with the investment we have received from new blue-chip institutions and IP Group, an existing shareholder,” said Giulio Cerroni, the chief executive officer of IXICO.
“Over the past 12 months, we have completed a strategic and operational review and announced contracts with existing and new global pharmaceutical customers, demonstrating commercial momentum. This funding provides the platform to accelerate our commercial strategy to drive revenue growth over the medium-term and our strong financial performance indicates that we are making good progress on our path to profitability," he added.
House broker, Shore Capital, said it viewed the raising of funds as supportive of the stated growth ambitions.
"Invigorated by new leadership, CEO, Giulio Cerroni is driving renewed focus on a commercially-led growth strategy, as evidenced by the momentum in new contract wins (c. £6mln in contracted revenues awarded during H1 2018). This has reinforced our confidence in management’s ability to deliver mid-to-high teen growth whilst cost-effectively managing the business," Shore said.
"We note a strong cash balance (Mar-18: £2.7m, +£0.3m versus Sep-17) and see the opportunity to further accelerate the top-line with access to additional growth capital," it added.
The shares were trading 1.5p lower at 32p.
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