Wynyard looks at rights offer

The NZX-listed crime fighting software company has been in a trading halt since February 17. Photo / Sam Frost

Wynyard Group is facing a cash squeeze after a planned share placement stalled and it was revealed that the company needed to raise sufficient capital by the end of March.

The NZX-listed crime fighting software company has been in a trading halt since February 17 when it advised the market that a planned share placement to raise capital was no longer viable, and that it was looking at other options.

The company yesterday confirmed that it was considering a potential rights offer to all shareholders, saying it had "a material dependency on raising sufficient further capital by the end of March 2016" to support its working capital needs.

In its preliminary results for the year ending December 31, the company posted total income of $26 million, and a loss of $44 million compared with $22 million the previous year. In the 2016 financial year, the company expected to deliver revenue of between $54 million and $65 million.

Wynyard Group said it had secured a $10 million short-term credit facility with major shareholder Skipton Building Society in the meantime, so it could access sufficient capital if required.

In November, Wynyard announced a plan to raise $30 million at a minimum $2 a share from investors in Australia and the US, however Craigs Investment Partners analyst Mark Lister said a slump in the market appeared to have stalled this.

"Unfortunately the market has gone against them before they could secure that capital which is partly just bad luck and bad timing," Lister said.

"Obviously the markets have taken a turn for the worse this year and the higher risk sectors and the tech space offshore has become much more volatile, so that window of opportunity appears to have closed quite quickly, and now they're in the situation where it sounds like they were relying on that capital injection that is no longer likely," he said. "They have secured some emergency money from one of their shareholders but it's by no means a long term solution."

Wynyard Group is expected to put out a further release today when its trading halt lifts. Wynyard shares last traded at $1.54 before the trading halt.