Betmakers Technology Group Ltd (ASX: BET) shares are catching the eye on Monday morning.
In early trade, the ASX tech stock is up almost 13% to 13.5 cents.
This means that its shares are now up 67% since the start of the year.
Why is this ASX tech stock surging today?
The catalyst for today's strong gain has been the release of an update from the betting technology company in relation to the acceleration of its transformation strategy.
According to the release, BetMakers has announced several key initiatives designed to generate further operational efficiencies and further improve operating leverage.
This includes further reductions in staff costs, the centralisation of corporate functions for streamlined operations, and the upgrades of customers and products to its advanced Next Gen technology platform.
Management notes that these initiatives and the recent progress of its transformation strategy are expected to put the company in a position to achieve operating cash-flow break-even during the third quarter of FY 2025. After which, it expects to deliver positive operating cash flow for the six months ending 30 June 2025.
In addition, the company has strengthened its balance sheet further with a new US$3 million debt facility with Tekkorp Holdings, which is a company controlled by its chair, Matthew Davey.
This will support its transformation strategy, provide additional financial flexibility, and further bolster funding capacity for any future strategic initiatives.
It has an interest rate of 12% per annum, with interest to accrue daily. The company notes that interest will not be capitalised.
Trading update
The ASX tech stock has released a brief trading update with today's announcement.
Management revealed that it currently expects revenue in second half of FY 2025 to be higher than first half.
Commenting on today's update, the ASX tech stock's executive chair, Matt Davey, said:
I am excited to see the impact our transformation strategy is already having on the business, and importantly, that management have been able to accelerate this strategy.
We are extremely pleased with the technology upgrades and the benefits this is delivering through both performance and lower costs. Coupled with other cost reduction initiatives, we have a clear line of sight to profitability. Executing the new debt facility provides us with the added flexibility to implement some of these initiatives.
BetMakers is on a financial transformation journey, which is designed to deliver long term value for shareholders. We are making strong early progress in this endeavour.
