Trimantium GrowthOps enters trading halt as it attempts to delist from ASX

October 26, 2020 9:30

Trimantium GrowthOps – the parent company of agencies including AJF Partnership and Khemistry – has entered a trading halt as it attempts to delist from the Australian Securities Exchange (ASX).

The company, formerly helmed by Phillip Kingston until the founder stepped back in February, told the ASX this morning that the halt was at the request of TGO, and will last until this Wednesday or until it receives a response to its application to delist, whichever comes sooner.

In a letter from company secretary Craig McMenamin to listings compliance advisor, Ivan Tatkovich – seen by Mumbrella – TGO said the impending announcement will outline the company’s reasons for delisting, including its: “share price valuation; limited trading of its securities; share price volatility; costs and administration of being listed; inability to raise capital through the issue of shares; and future funding alternatives”.

The board reviewed the company’s position over several months, the company added, and “unanimously formed the view that removal of the Company from the official list of the ASX is in the best interests of shareholders and the future success of the Company”.

“One of the primary drivers to list GrowthOps on the ASX was to provide the group of companies that came together to form GrowthOps with access to capital markets to drive and fund future business growth,” TGO said.

“More than two years on, the Company hasn’t benefited from this advantage, while at the same time experiencing the burden and challenges of being a publicly listed company.

“Furthermore, the board believes the share price is not reflective of the underlying value of the Company and hasn’t been for some time. The board is confident that being an unlisted public entity will free the Company from various constraints and burdens, whilst also providing it with access to alternative funding sources to help achieve its growth objectives.”

TGO’s share price is currently 5.3c. In March 2018, when it listed, it sat at $1.22.

Kingston stepped away from the company a month after its chief executive Jason Polson resigned after just three months in the role. Polson’s short stint at TGO began after the majority of its directors, including its chair Dominique Fisher and CEO Paul Mansfield, resigned last October.

They were replaced by a new lineup of directors, while Kingston simultaneously converted to a non-executive director role.

Kingston also founded diversified investment firm Trimantium Capital, and was CEO of global pension operator Sargon, which went into administration in February with two other TGO entities.

Earlier this month, he published a blog post reviewing GrowthOps’ financial year, in which he said TGO is “one of the most poorly understood stocks on the ASX” and that its “ASX closing price will not be a good measure of its intrinsic value for a very long time”.

“The vast majority of the online coverage of the company is either 1) ad hominem attacks against me or key people, 2) deliberately misleading to the point of market manipulation or 3) automatically generated content by content algorithms,” Kingston wrote.

“The sheer lack of company awareness and three years of idiosyncratic interpretation of ‘facts’ around TGO are likely to continue the irrational stock market outcomes which have plagued the stock since its IPO [initial public offering] in March 2018. These quirks unpin trading opportunities until the stock is liquid enough so that its trading price is a reasonable approximation of the underlying value of a share. This day is still a long way off.

“Trading volumes are low, and the big shareholders haven’t traded much at all, and so the market capitalisation of the company is set by small trading aberrations between small shareholders. This is a very inefficient and ineffective way to value the company.”

Kingston

Kingston added TGO is in its “foundational years and has a long way to go to realise its original vision which is well articulated in its IPO Prospectus documents”.

“I still believe it can easily be a A$1 billion+ per annum revenue company which would still represent a tiny fraction of its potential market share in the Asia Pacific region,” he said.

According to Kingston, the business needs to focus on its technology practice, geographic focus in light of COVID-19, and cost management.

He said “there is still more fat to cut in non-productive roles” but emphasised that “everything I tried to instil at GrowthOps is about effectiveness and quality”.

TGO is set to hold an annual general meeting on 30 November – at which it will seek shareholders’ approval to delist – and expects to have a response to its request to delist by the end of the week.

CEO Clint Cooper thanks shareholders “for the faith they continue to show in our business and their support”.

“While we’re excited by the prospect of delisting, it’s business as usual in many ways. As always, we’re grateful to our staff for their continued commitment and our clients for their ongoing trust,” he said.

“GrowthOps is unequivocally a stronger business today and we’re confident that delisting will help to continue this positive trajectory.”

TGO timeline:

2017:
16 November: AJF Partnership set to be acquired by soon to list group, Trimantium

2018:
27 February: GrowthOps reports $48m loss as Asia-Pacific Digital writedowns bite
18 March: Tobias Wilson exits APD Singapore following Trimantium GrowthOps acquisition
31 May: Trimantium GrowthOps appoints executive director Paul Mansfield as CEO
15 June: Trimantium GrowthOps launches stock market bid for Singapore based agency group
30 July: Trimantium GrowthOps closes in on Asia Pacific Digital acquisition
8 August: Trimantium GrowthOps succeeds in APD bid
23 August: Trimantium GrowthOps announces $13.6m statutory loss and $7.1m pro-forma net profit
6 September: Khemistry’s managing partner Andy Fyffe becomes CMO of parent company Trimantium GrowthOps
28 November: Trimantium GrowthOps rebrands with ‘fresh’ visual identity