BOS GLOBAL Holdings Limited Shareholder Update (5295H)

TIDMBOS

RNS Number : 5295H

BOS GLOBAL Holdings Limited

08 June 2017

BOS GLOBAL Holdings Limited

ACN 009 087 852

AIM Release

8(th) June 2017

Shareholder Update

As shareholders will know, the aim of BOS GLOBAL Holdings Limited ("BOS GLOBAL" or "the Company") is to build a global company that is focused on improving productivity and creating operational efficiencies in the workplace, primarily by collecting and generating workplace analytics. We have made excellent progress and the Company believes we have the platform in place to create a truly global business with a state of the art product portfolio.

Having recently received comment regarding the business, strategy, funding and structure, we are pleased to draw together key points from the last few months' RNS's and provide a further update of the Company's progress.

Our strategy remains focused on building a global business and generating shareholder value. We have our own service range which has been recently augmented by the launch of the patented BOS360 Work Patterns(TM) Platform as a Service (PaaS) (www.bos-360.com) along with our core patented product, BOS Time(TM). These products strengthen our offering which already includes BOS Meet and BOS Automate, which are gaining traction in the market place.

In tandem with our own service range we have been identifying complementary businesses that will accelerate our global growth. Accordingly, we were delighted to have completed the investment of a 40% interest in Australian based Call Design Pty Ltd ('Call Design') (www.calldesign.com.au) announced 23(rd) May 2017, for a consideration of GBP280,000 from internally generated cash and the issue of 5,040,000 Ordinary BOS GLOBAL Shares (the "Consideration Shares"), which are subject to a 12-month lock-in. The total market value of the consideration at investment closing represented a multiple of 6.4x EBIT (Call Design 2016 Actual, 40% attributable basis). This investment represents a major step in our development, particularly with the potential operating synergies that both parties recognise. Call Design generates contracted revenues from its 60 clients worldwide, with the majority of its clients averaging five years tenure, and strong organic growth prospect, particularly from its North America business.

Call Design is a great fit as a BOS GLOBAL partner. It is a profitable, global provider of workforce optimisation tools, focused particularly on call centre services, which has an established blue-chip client base. It has significant multi-sector exposure, which includes all four of Australia's major banks, leading international telecommunications companies, blue chip insurers and governmental bodies, and a current operational reach spanning 26 countries.

The investment fits ideally with BOS GLOBAL's global growth strategy - BOS GLOBAL to initially target the Australian, UK and US markets, with a primary focus on securing customers in the financial and government sectors. As part of the investment, Michael Travia has assumed a position on the Board of Call Design to maximise the potential for realising operational synergies as we look to increase our sales and marketing channels. The penetration of Call Design and its contract profile was highlighted in the recent announcement of an additional contract extension with a major Australian Banking and Finance organisation with a value in excess of A$1.3m (see BOS GLOBAL RNS of 5 April, 2017).

Furthermore, Call Design is an official Innovation Partner with discounted license fees paid monthly in advance for each of the BOS GLOBAL products in addition to being signed as a Platinum Reseller, thereby automatically receiving our additional products as they are launched to market over the next three years. Both parties are committed to a long-term relationship and growing successful businesses. This relationship is further underlined by the stock component of the transaction and the further commitment by the Directors of Call Design to provide us with First Right of Offer and First Right of Refusal to acquire the 60% balance of Call Design at the same proportional rate of cash and shares as applied to the initial 40% Investment. Call Design anticipates materially growing its revenues in the Financial Year ending June 2018 from the sale and licenses of BOS GLOBAL products. We believe this is a strong vote of confidence in the mutual benefits to be gained as a result BOS GLOBAL and Call Design executing the Call Design Shareholder Agreement on the 23(rd) May 2017.

On a wider level, we continue to expand our reseller network to increase market penetration, entering into an agreement with a London based reseller to enter the UK market. A trial is currently underway with a client of the reseller ahead of targeting commercial roll out amongst corporate clients. We have additionally bolstered our sales support function by employing personnel as part of an ongoing recruitment campaign to support new and future channel partners. In essence, we are building a platform that we can leverage to grow market share.

We have also formed a new Global Project Management Office ("Global PMO") to handle single transactions that have a value in excess of US$20 million within a three-year period, including acquisitions, Innovation Partnerships, or Platinum Reseller agreements. As part of this initiative the Company is establishing three primary regional divisions within its primary target markets - namely BOS North America, BOS EMEA (Europe, Middle East and Africa) and BOS Asia-Pacific - which will work alongside the Global PMO to identify new business opportunities and support the continued roll-out of BOS GLOBAL's innovative software portfolio. We also made a number of key appointments including; Mr. Bill Brooks as Director of the Global PMO and Managing Director Designate of BOS GLOBAL Asia Pacific; Mark Bremberg as Head of Sales of BOS GLOBAL, and an Executive Member of Global PMO; as well as Greg Mason as General Manager of Australia and an Executive Member of the Global PMO with responsibility for Technology and Investments. We believe this both underlines our growth ambition and, due to the quality of the individuals, validates our proposition.

With regards to funding, the Company continues to draw down funds in accordance with its GBP1.392m Convertible Note agreement ('Note') with Innovation Corporation Limited. As mentioned in the notification of the most recent drawdown of GBP116,000 at a fixed rate of 16 pence per share, these drawdowns are subject to the Company not being in a closed period as defined by the Market Abuse Regulations ('MAR'). After this drawdown, GBP886,000 remains available to the Company under the Note. Additionally, the Company anticipates receiving the proceeds upon completion of the transaction for the disposal of the Company's 75% interest in its legacy resource asset, Copper Range (SA) Pty Ltd ('CRSA') for approximately GBP386,000 before costs as announced on 12th May 2017. Updates will be provided on the progress of the Copper Range transaction in due course.

As part of the Company's global strategy, and as announced recently, the Board has taken the decision to commence the process of moving its headquarters to London. Coupled with this decision, BOS GLOBAL also resolved to restructure its Board so that the make-up consists of individuals who have both the experience in the relevant sectors and are also connected to London. The first phase of this involved David Ireland, an existing Independent Non-Executive Director of BOS GLOBAL, taking over the role of Independent Non-Executive Chairman replacing Larry Shutes, and Executive Director Murray Bergin stepping down from the Board to focus his energies on an increasing workload within the senior management team. The second phase, as noted in the recent announcement, is progressing, with the Company actively undertaking a process to identify and appoint additional directors, including a Financial Director, with the relevant credentials to drive the Company's growth.

On an opportunity level, we believe there is a huge market for our service offering. The world is changing rapidly and companies are seeking to maximise efficiencies, through technological innovation, in an increasingly competitive world. A recent note On BOS GLOBAL published by Capital Networks emphasised the market potential of the Company's services. The Capital Networks note concluded that, based on an analysis of peer industry fields, in particular Client Relationship Management systems, the potential scale of the global market by 2020 for the type of capability offered by BOS GLOBAL (BOS360) is at least $100bn by revenue. The report also went on to say that the route to market offers rapid scalability, due to the flexibility of the PaaS service model, and the potential benefits of partnering agreements. Furthermore, the Capital Networks report also put forward an opinion that BOS GLOBAL only has to capture a small relative share of the addressable market to justify a market valuation which would be a multiple of where the shares were valued at the time, and incidentally, where they are valued today. A copy of the report is available on https://bosglobal.com/optin9991102.

The Company has made excellent progress this year with multiple milestones reached and the advancement of our development start to become a global player in operational efficiencies. We have achieved first sales and gained a significant number of subscribers across our core geographic markets of the UK, USA and Australia. We believe that key commercial milestones during the next six months could deliver good news for shareholders and improve the visibility of our opportunity. On the back of all these achievements since the Admission of BOS GLOBAL to trading on AIM and the strong future prospects that we continue to lay the foundations, we believe that we have an exciting business and investment proposition.

Our shareholders are important and we have scheduled a shareholder call for Tuesday 13 June 2017, 11.30am GMT, the details of which can be found below. Finally, we thank you for your support and look forward to updating shareholders as we grow the business.

Kind regards

Michael Travia

To participate in the shareholder conference call, please dial 0808 109 0701, or [phone] if you are calling from outside of the UK, and enter participant code 5166737# when prompted to do so. Please note that all lines will be muted except for the BOS GLOBAL management, however the Company invites shareholders to submit questions to its public relations adviser, St Brides Partners Ltd, ahead of the call via email to [e-mail].

The management team will strive to answer as many questions as possible during the call. A recording of the call will also be made available on the Company's website.

If you have any problems accessing the call, please contact St Brides Partners Ltd on [e-mail] or call [phone].

**ENDS**

For further information please visit www.bosglobal.com or contact:

 
 Michael Travia       BOS GLOBAL Holdings    Tel: [phone] 
  Managing Director    Limited                4071 
                                              E: [e-mail] 
===================  =====================  ============================== 
 Andrew Thomson       RFC Ambrian            Tel: [phone] 
  NOMAD                Limited                2500 
===================  =====================  ============================== 
 Charles Goodfellow   Peterhouse Corporate   Tel: [phone] 
  / Lucy Williams      Finance Limited        9791 
  Broker 
===================  =====================  ============================== 
 Elisabeth Cowell     St Brides Partners     Tel: [phone] 
  / Charlotte Page     Ltd                    1177 
  Financial PR 
===================  =====================  ============================== 
 

About BOS GLOBAL

BOS GLOBAL is a Software Company dedicated to making workplaces more productive.

It does this through its patented platform built to capture and analyse activities as a smart way to help individuals to achieve greater levels of workplace efficiency.

The platform known as BOS360 Work Patterns Platform as a Service ('BOS360 PaaS'), launched in May 2017, is unique in its ability to digitally render real time views of productivity in the form of Work Patterns at an individual, team or organisation level.

The platform comprises of three main business competencies;

1. Workplace Automation - How digital information (records and documents) is managed in the workplace.

   2.    Workplace Productivity - How people are spending their time at work 
   3.    Workplace Integrity - How workplace information is secured and validated. 

Each of these competencies are supported by a range of enterprise grade software products designed to perform a specific set of workplace functions. These products also act as both collectors and feeders of information to the BOS360 PaaS for use in the generation of Work Pattern reports and Workplace Analytics.

In addition to BOS Meet and BOS Automate, which were launched in December 2016 and January 2017 respectively, BOS Time will be launched this month in tandem with BOS360 PaaS.

BOS GLOBAL aims to generate re-occurring income through subscriptions of its BOS360 PaaS and supporting products, as well as through licensing of its patented Work Pattern technology. The Company's sales strategy is focussed on building a global distribution partner network via Enterprise Software Vendors, Professional Services organisations and Consulting Practices.

The Company has a 40% equity interest in Call Design Pty Ltd, a profitable, Australian based, global provider of workforce optimisation tools, focused particularly on call centre services, which has an established blue chip client base. This highly synergistic investment is expected to provide multiple cross-selling opportunities to both companies in line with BOS GLOBAL's strategy to deliver a comprehensive business optimisation offering globally. This investment includes the 1(st) Rights of Offer and Refusal for BOS to acquire the balance of Call Design on the same financial terms as the initial 40% investment

Call Design sets a new standard for Workplace Optimisation, while BOS GLOBAL's software sets a new standard for Workplace Efficiency. Both products will be offered through BOS360 PaaS, setting a new standard for Workplace Analytics to give companies greater control in making informed, fact-based decisions on their operational activities; Workforce Analytics is a combination of software and methodology that applies statistical models to worker-related data, allowing enterprise leaders to optimise human and machine resources.

BOS GLOBAL Holdings Limited is an AIM listed company incorporated in Australia, operating from offices in Melbourne, Sydney and Brisbane. The Company also has a regional office in Hong Kong, responsible for the Asia-Pacific region and processing of large scale enterprise product sales with a greater than US$20 million revenue stream over an initial three-year contract term. Such deals include acquisitions and investments like the size of Call Design.

The Company is working towards its expanded London Office with its planned move of both Corporate and Board function to London in late 2017. Further, plans are well underway to increase its representation in Europe, the Middle East and Africa (EMEA) and North America with that of Call Design, and with offices on track to be established in 2017 in London and San Francisco respectively.

This announcement contains inside information as stipulated under the Market Abuse Regulations (EU) no. 596/2014 ("MAR").

This information is provided by RNS

The company news service from the London Stock Exchange

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June 08, 2017 04:20 ET (08:20 GMT)