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TZ Limited Raises $6.4M To Drive Growth

TZ Limited (ASX:TZL) has raised $6.4 million through a share placement priced at $0.11 per share, placing it in a strong position to take advantage of current, identified future growth opportunities.

The oversubscribed placement was well supported by both institutions and sophisticated investors and takes the total funds raised over the past month to $8 million.

Earlier this month, the company raised $1.63 million through a share purchase plan that was also priced at $0.11 per share.

TZ also reaffirmed its revenue guidance of between $18 million and $20 million for FY2015 subject to the timing of invoicing of orders in the fourth quarter.

Morgans acted as Lead Manager and Bookrunner to the Placement.

"The completion of this capital raising is another important milestone for TZ as it will allow the company to accelerate its revenue growth beyond FY2015 by pursuing further contract wins and business opportunities," executive chairman Mark Bouris said.

"It is also pleasing to secure the support of a number of new, quality institutional investors."

Recent Activity

The company has recently won a number of new contracts with Westpac, KPMG, Pos Malaysia, University of Technology Sydney and a number of other major corporations.

In March, it signed a memorandum of understanding with KPMG to negotiate a definitive enterprise-wide agreement for the supply of TZ's Day Lockers as well as associated locker management hardware and software for KPMG properties.

Supply will commence on a limited basis to initial deployments in Adelaide, South Australia and in Parramatta, New South Wales subject to finalisation of commercial terms.

Westpac's (ASX:WBC) use of Day Lockers at the three new iconic towers, International Towers Sydney (ITS), at Barangaroo, represents a high profile deployment for TZ.

The ITS properties have been benchmarked against the best office developments in New York, London, Hong Kong, Singapore and Shanghai and are designed to demonstrate the latest thinking in workplace design and sustainability.

It has also secured a six-year parcel locker contract for the supply of electronic parcel lockers to Pos Malaysia Berhad, cementing its leading position as a supplier to national postal operators.

The six-year contract covers turnkey supply of TZ hardware and software as well as support and maintenance services over the proof-of-concept, pilot and roll-out phases of the project.

It includes customisation, integration, testing, commissioning and post-implementation support of the lockers.

Analysis

The $6.4 million placement takes the total raised by TZ Limited in the past month up to $8 million, positioning the company to accelerate revenue growth beyond FY2015 by pursuing contract wins and business opportunities.

It also amply demonstrates the appeal of TZ's commercialisation upside and the capacity of its technology platform to scale globally of its Packaged Asset Delivery (PAD) and Infrastructure Protection (NYSEARCA:IXP) businesses.

Recently, TZ estimated sales potential of up to US$301 million in the 2015 to 2018 horizon for its PAD business with the majority driven by expansion of the existing South East Asian postal locker network, expansion of the U.S. logistics network and European postal tender.

In the same period, the IXP business has sales potential of up to $27 million from clients in North America, Europe, Australia and Asia.

The firmness in the TZL share price after the capital raising indicates the growing market support for the upside still in the stock.

Based on estimated revenues for FY15 as well as incorporating recent contract wins and growing momentum Proactive Investors recently set a new price target of $0.25-$0.27 in 12 months.

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