Axiom Properties Limited - Quarterly Cash Flow Report for June 2024
AXI (AXI) Share Update July 2024 Wednesday 24th
Axiom Properties Reports Quarterly Cash Flow and Business Activities
Axiom Properties Limited (ASX:AXI) has released its quarterly cash flow report for the period ending 30 June 2024, highlighting key financial movements and business activities.
Instant Summary:
- Cash reserves decreased by $852,000.
- Current cash reserves stand at $966,000.
- Increased leasing enquiries for Butler Large Format Retail Centre.
- Expected net proceeds of $1.4 million from Butler pad sites settlements.
- Acquisition of ListSure for $2 million.
- Sophisticated and Professional Investors provided a $2 million unsecured loan.
Financial Overview
Axiom Properties Limited reported a decrease in its cash reserves by $852,000 for the June quarter, leaving the company with $966,000 in cash reserves as of 30 June 2024. The company's business activities during the quarter included increased leasing enquiries for the Butler Large Format Retail Centre, which has remained stable at around 30% unlet space.
As the unlet space is committed, Axiom will be entitled to receive its share of the income guarantee of approximately $1.2 million held in trust. Additionally, the company is working towards finalizing all conditions precedent to facilitate the settlement of the two remaining Butler pad sites, which is expected to yield net proceeds of around $1.4 million in the next two quarters.
Business Activities
The company continues to deploy growth capital into development projects currently in the feasibility stage. These projects will seek funding mechanisms once feasibilities are complete and progress to the construction phase. Payments for staff, administration, and corporate costs were consistent with previous quarters and are expected to remain at this level.
Axiom also announced the acquisition of ListSure for $2 million. After adjusting for cash at bank of ListSure on acquisition, the net investing cash outflow was $1.697 million. The company inherited two wholesale credit facilities from sophisticated and professional investors, secured against the assets of ListSure. Axiom is working with these investors and ListSure management to refinance and increase the loan sizes to support forecast growth.
Financing Activities
Sophisticated and Professional Investors provided a $2 million unsecured loan to support the acquisition of ListSure, with terms detailed in the Appendix 4C. After the quarter ended, these investors provided an additional $1 million unsecured loan to support the company while it works towards realizing proceeds from Butler and other potential asset sales, expected in the coming quarters.
Other financing cash outflows for the June quarter amounted to $59,000, relating to the right of use lease liability of the Adelaide and Sydney offices and a motor vehicle. Payments to related parties and their associates included director fees, salaries, wages, and costs incurred on behalf of the company in the ordinary course of business, reimbursed at cost.
Future Outlook
Over the past two years, Axiom has invested in a unique set of property technology companies, realized proceeds from various developments, and entered into several future development opportunities. The board and executives are now focused on delivering stakeholder benefits from these technology investments and property developments under feasibility, both of which require ongoing capital support. The company is assessing capital and debt opportunities to support this growth period and expects to share further details in the coming months.
The decrease in cash reserves and ongoing need for capital may raise concerns among investors regarding Axiom's liquidity and financial stability. However, the company's strategic investments and potential proceeds from settlements and asset sales could positively impact future cash flows. The acquisition of ListSure and the support from sophisticated investors indicate confidence in Axiom's growth prospects.
Investor Reaction:
Investor reactions have been mixed. Some are optimistic about the potential proceeds from the Butler pad sites and the strategic acquisition of ListSure, while others are cautious about the decrease in cash reserves and the need for additional financing.
Conclusion:
Investors should closely monitor Axiom Properties' upcoming settlements and strategic plans for capital and debt opportunities. The company's ability to execute its growth strategy will be crucial in maintaining investor confidence and achieving long-term value creation.