(Alliance News) - React Group PLC said Wednesday it it has raised GBP1.3 million through the placing of 83.1 million shares at 1.50 pence each.
Shares in the carpet cleaning company were 12% higher in London on Wednesday afternoon at 1.70p each.
Chief Executive Shaun Doak said: "React has built a solid foundation on which to develop sustainable growth. Whilst we provide a thorough and rapid response to the demand for deep cleaning and decontamination of property exposed to SARS-CoV-2, the virus that causes Covid-19, we continue to build our core business where the demand for React's specialist know how and skills are equally relevant and over time more sustainable."
The company said the placing was oversubscribed, with the resultant placing representing about 17% of React's issued share capital.
React noted recent trading has been ahead of management expectations. As a result, it expects to deliver a "small" operating profit for the six months ended March 31, and believes it remains well placed to meet or exceed management expectations for the full year to September 30.
"The board of React believes there is an opportunity to scale the business through organic growth and carefully selected acquisitions focusing on markets where React has differentiation and access to higher margins. The board of React also believes there is an opportunity for the company to materially grow profitable revenue with large customers in the health, rail and facilities management sectors in addition to strengthening recurring revenue streams through incremental and long-term contracts," the company added.
Doak said: "This oversubscribed fundraise recognises the progress achieved so far and provides React with the working capital and balance sheet strength to support ambitions for further sustainable and profitable growth."
By Paul McGowan; paulmcgowan@alliancenews.com
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React Group (REAT)