As such, the MyState share price will remain frozen at Friday’s closing price of $4.85 to enable the placement to be completed. Trading is expected to resume on Wednesday.
The financial and fund management company also detailed its strategy and outlook in today’s release. Let’s take a look.
MyState capital raising
MyState today announced it aims to “rapidly accelerate” its growth strategy through a placement to raise up to $80 million. The placement will comprise a $20 million institutional underwritten offer and a $60 million entitlement offering to all eligible shareholders. All shares under the capital raise will be issued at $4.30.
The company also outlined its new growth strategy for the coming years. MyState wants to bring in new customers by creating better experiences for them on its current platform. The company said it was turning to a more digital and intuitive platform to meet this goal.
It is also aiming to simplify operations while expanding its distribution network to enhance both productivity and distribution.
With these priorities, the company has outlined four objectives to be achieved by 2025:
- Accelerated home loan and retail deposit growth over the medium term, while maintaining asset quality.
- Improved operating leverage.
- Return on Equity accretion as capital is deployed.
- And sustainable growth in the company’s EPS over the medium term.
MyState chair Miles Hampton explained:
The capital raising will support the business to pursue a significant acceleration of its growth strategy. Since 2016, MyState has increased its home loan book by 43%. We now see an opportunity to build on that success and substantially increase our growth trajectory.
This is important as it helps us to remain competitive and provide the services that our customers expect whilst improving shareholder value.
Trading update and guidance
In MyState’s trading update and FY21 guidance also released today, the company advised it was well ahead of the prior corresponding period for the 10 months ending 30 April.
Highlights include a net profit after tax increase of 17.1%, and earnings per share (EPS) up 16.2%.
In terms of guidance, the company said it was on track to deliver growth in operating profit of 11%-14%.