News and Announcements
Connexion Media Confirms Completion of Strategic Review
- Published April 03, 2017 12:00AM UTC
- Publisher Wholesale Investor
- Categories Company Updates
Connexion Media Limited (ASX: CXZ), an innovator in the connected car market, is pleased that it has completed a strategic review of its operations and strategy. This will be reinforcing its efforts to drive telematics sales in the US market.
KEY TAKEAWAYS:
- Completion of Company-wide strategic review:
- Revised strategy to focus on embedded, strategic relationship with global automotive company GM and larger North American telematics market to drive sales from existing addressable market and expand into Europe;
- Sales and marketing efforts to originate from Detroit in the US, a key automotive hotspot, headquarters of GM o Adaptation of CXZ Telematics platform to cater for larger fleets of 1,000+ vehicles;
- Cash outflows to be reduced further though cost savings initiatives;
- Significant Board changes announced separately today, with appointment of Executive Chairman and US-based CEO;
- Successful fund raise, with $1 million from sophisticated and professional Australian and international investors with funds to be used for sales and marketing initiatives.
- Connexion is in continued advanced discussions with potential global automaker partners from US and Europe, with 5 RFQ’s currently being processed.
US Focused Strategy Targeting Broader Market
Following a strategic review of its operations and growth strategy, Connexion Media has resolved to focus its operations on its telematics sales opportunity, primarily in the US market while further developing opportunities from the embedded, strategic relationship with Connexion Media’s automotive partner, General Motors (GM). Consistent with this focus, the Company has promoted its Head of USA Operations and Chief Marketing Officer, Mr Junior Barrett, as Chief Executive Officer (see announcement today). Mr Barrett will be based in Detroit, USA.
From its Detroit office, the Company’s sales and marketing team will be bolstered to broaden the section of the fleet vehicle market that it will target, aiming to sign up fleet managers with 1,000+ vehicles, in addition to its original focus on fleet customers with up to 15 vehicles. By adapting its telematics platform to host larger fleets, the Company will expand the number of vehicles it can target by an additional 1.75 million vehicles that can be accessed via a concentrated customer base of fleets across the US.
As part of the strategic review, the Company has identified further net cost savings from across the business that can be achieved through a reduction in head office costs and other corporate overheads.
Successful Capital Raise
The Company has been successful in raising $1 million via a placement of 13.8 million new fully paid ordinary shares at an issue price of 7.2c to Australian and international sophisticated and professional investors under the 15% placement capacity. Westar Capital acted as Lead Manager for the offer which received strong support from several long-term strategic investors in the Company, including newly appointed Non-Executive Director and entrepreneur, Mark Caruso.
The funds will be used for ongoing sales and marketing initiatives, as well as for working capital purposes. The Company will also leverage the funds to build its sales and marketing function in its priority US market through the addition of sales and marketing headcount in the US.
Junior Barrett, newly appointed CEO of Connexion Media, said:
“With Connexion’s main development initiatives now completed and our telematics platform easily adaptable for larger fleets, the Company can now focus on ramping up its sales and marketing efforts particularly in the key US market. By making minor adaptations to our telematics platform to facilitate the management of larger fleets, we can significantly expand our potential customers and capture more vehicles for each customer that signs on, through a more concentrated target customer base.
“With a strengthened US-based sales and marketing team and the strong support we have received for our Placement, we will be able to build on the very strong reputation Connexion has established in the automotive industry to increase our sales.”
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