The BWX Ltd (ASX: BWX) share price has returned from its trading halt and is storming higher.
At the time of writing the personal care products company's shares are up 7% to $3.91.
Why was the BWX share price in a trading halt?
On Thursday BWX requested a trading halt in order to undertake a $50 million equity raising. This comprised a $40 million fully underwritten institutional placement at $3.40 per share (a discount of 7.1% to its last close price) and a $10 million share purchase plan.
The company behind the Sukin brand advised that the funds would primarily be used for the development and construction of a game-changing, world class manufacturing facility
BWX's Chief Operations Officer, Rory Gration, explained: "This future world-class facility is expected to significantly boost BWX's in-house manufacturing capacity, capability and competitive advantage; provide up-skilling opportunities for our team; and enhance the ways in which we serve our retail partners, customers, and consumers all over the world."
"We believe this is an ambitious plan but one that creates further earnings potential to deliver sustainable returns and long-term value creation to shareholders." he added.
Placement complete.
The good news for BWX is that the manufacturing facility came a step closer to becoming a reality this morning after the company successfully completed its $40 million institutional placement.
BWX advised that it received strong interest from existing offshore and Australian institutional shareholders, as well as other institutional investors. This led to demand significantly exceeding the funds BWX was seeking to raise.
BWX's CEO and Managing Director, Dave Fenlon, commented: "We are very pleased with the strong support from our institutional shareholders who are right behind our plans to transform BWX's operating model with the development of a new world-class manufacturing facility."
"Following a strong FY20 trading performance, we are committed to using the Placement proceeds to invest in the new facility which we expect can solve capacity constraints, unlock significant efficiency gains, and deliver growth over and above our Three Year Strategic Plan," he concluded.
FY 2020 performance.
Speaking of its FY 2020 trading performance, BWX released a trading update with its equity raising announcement.
According to the release, in FY 2020 BWX delivered a 25% increase in unaudited revenue to $187.6 million and a 30% lift in EBITDA (pre-AASB 16) to $27.5 million. This was in line with its FY 2020 guidance of 20% to 25% revenue growth and 25% to 35% EBITDA growth.
On the bottom line things were even better, with BWX reporting a 48% jump in unaudited statutory net profit after tax to $14.1 million.
