The Carbonxt Group Ltd (ASX: CG1) share price closed yesterday's trade up 32.43% for the day, thanks to the completion of a successful $2 million capital raising.
What happened?
Yesterday morning, Carbonxt announced it has received firm commitments to raise approximately $2 million (before costs) from leading institutions and investors. Despite the issue price of 16 cents for the 13 million new ordinary shares in the company, the Carbonxt share price closed yesterday at 24 cents. This follows a large increase of 19% last Monday.
The company reported that the placement received very strong support both from new and existing investors. The placement will be used to strengthen Carbonxt's balance sheet and position the company to accelerate growth into FY21.
In its capital raising presentation, Carbonxt advised that its anticipated FY20 growth did not eventuate, due to a number of factors including extended payments impacting revenue growth. The company provided revised FY20 guidance, with revenue now expected to come in at $16 million, $2 million down on its earlier forecast.
The release also forecast strong revenue growth of 40% or more in FY21, as customers return to levels similar to that of pre-COVID-19. The company expects to be profitable and cashflow positive from 2QFY21.
What does Carbonxt do?
Carbonxt is a cleantech company that specialises in the production of powdered and pelletised activated carbons for use in industrial pollution and emission control.
Carbonxt has recently released a new pellet aimed at removing phosphate from streams. The development of these pellets would eliminate any reliance on third-party and foreign-sourced input materials, contributing to significant margin expansion expected in FY21.
About the Carbonxt share price
The Carbonxt share price fell from its 54 cent high earlier this year down to 12 cents in March. Despite yesterday's gains, the Carbonxt share price is still down 52% year to date, and 19% lower than this time last year.
