Widecells Group PLC (LON:WDC) Chief Executive Officer João Andrade and Chief Financial Officer David Bridgland caught up with DirectorsTalk for an exclusive interview to discuss why their shares were suspended, the placing & what the funds will be used for, being back in a stable position, operations, and key developments investors should look out for.
Q1: Quite a lot has happened since we last spoke, firstly, let’s address the share price. João, can you explain why trading in your shares was suspended?
A1: Basically, we were conducting a fundraising exercise since the beginning of the year, some elements of the fundraise had been delayed, which mainly has to do with legal and financial due diligence, and for that reason we were unable to publish our 2017 Annual Results within the 4 months that are required to post our financial year-end which is 31st December 2017. We had until the 30th April to publish our results but because we were unable to meet that deadline, the shares were then suspended until we were in a position to publish the results which we have now done and concurrently, we have also completed a placing to execute our business plan for the next 12 months.
Q2: Now, obviously it’s great news that trading has now recommenced, a key part to getting your shares trading again was completion of the recent placing and you’ve received commitments to raise gross proceeds of £2.2 million. Firstly, David, can you run through this placing and explain how it was conducted?
A2: We carried out a private placing for £1.47 million which we announced on the 10th May, that was supported by the majority of the investment came from our existing investors, it was very good to see our largest institutional Miton Group who had a just under 10% have increased their investment now to more than 10%. The directors have followed the investment, they’ve come in with just under £200,000 of investment as well to show their commitment to the company.
The second part of the placing, the £1.47 million was a private placing, we had a live bookbuild conducted using the Teathers App which allows a wider section of investors to come on board. That raised the additional just over £500,000 which took us to £2.02 million.
Q3: What will these funds be used for?
A3: Well, we’re going to be focussing on the three key divisions within the business.
We’re going to be developing the Widecells’ BabyCells product which was launched earlier this year. We’re going to be investing in the marketing of that product in the second half of this year.
Also, the CellPlan product which is the insurance product, that is going to continue to be rolled out in different geographies around the world and we’re having to invest in that platform in order to be able to make those sales in those markets.
WideAcademy, our training and education, that’s been expanded and we’re going to be developing a service that turns it into a product that generates revenues by having people subscribing for information and news and information on the website and on the platform.
That’s going to be taking up a significant part of the funds we’re raising, we’re going to be investing the rest in working capital of the business to allow the business to grow as we move forward through 2018.
Q4: So, just to clarify, with the fundraise completed are you now in a stable position?
A4: Yes, we had to take out some bank debt at the end of last year in order to be able to complete the placing. We’re looking forward to continuing to have that bank debt in place as we move forward into the second half of the year so that the funds we are raising are all being invested in the business to generate sales and returns for the investors.
Q5: João, at an operational level, have things been hindered as a result of the trading suspension?
A5: That’s a good question. I have to say that our teams working extremely hard during this period where we had these challenges in the market with the shares being suspended and whilst we were completing the fundraising, but our team have been doing the same job operationally.
We also had support from our key partners particularly for the CellPlan product, mainly the stem cell banks, that’s in different geographies that will be offering the CellPlan product to their clients that have either stored their stem cells already or are looking to store stem cells. Our insurance partners as well have worked with us, everyone has been supportive despite the fact we had these challenges in the market which I think is a good sign for the relationships that we have with our partners and also the work that’s been conducted by our teams.
Long story short, this means that we’re on track for the next 12 months to launch CellPlan in different countries, from Spain to Thailand, Singapore, Brazil and continue the roll-out in the UK. Our BabyCells product, which is the umbilical cord blood stem cells storage, we’ve started off the project in the UK and we are looking for agents throughout Europe where we are licensed now.
So, operationally, things have been progressing as usual, we have some delays in launching some of our products over the last 6 months, mainly due to regulatory requirements but now that’s is all behind us. We have all our products licenced for the markets we are looking to enter except for CellPlan, we are looking for fronting insurance companies in different geographical locations around the world where we have contracts to deploy the product.
So, we are now in a stronger position with the fundraising completed and all the contracts to roll-out our products for the next 12 months. It’s important to know that every pound will be investment, particularly from this fundraise, will be used to concentrate on generating sales.
Q6: I think you’ve already alluded to this, but looking ahead, what are the key developments for investors to look forward to from Widecells Group?
A6: Mainly, we are really focussed on the next 12 months in executing the contracts that we have already signed for CellPlan so it’s basically making those contracts operational over the different countries we are looking to launch the product.
Similarly, in our stem cell storage research operation, on the research side it’s just concentrating on completing the research projects as we move along this year, some of them might be extended to the beginning of next year and bringing more revenue.
Focus on what can really generate stronger results and increase our top line, it’s the stem cells storage service in our WideCells division where we launched in the UK and are now looking for agents to represent us and launch the product in all the countries throughout Europe.
WideAcademy is just a natural development of the platform, we had focussed our investment mainly in CellPlan and in the WideCells division, we have reviewed some of the investment that we were initially planning in WideAcademy. The main reason for that is we, again, are looking to use every pound that we have to generate the most profit that we can.