Published: 3 July 2005
A gathering of just 13 people round a meeting-room table off the foyer of Auckland’s Quay West all-suites hotel on Friday authorised the switch of collapsed retail franchise manager RetailX Ltd into the ownership of an SMS (short message service) business.
The company will stay listed on the NZAX, which is NZX’s alternative exchange for developing companies & those with non-traditional structures. It will change its name to Plus SMS Holdings Ltd on Monday 11 July, and change its NZAX ticker symbol to PLS.
The switch was signalled in March, when RetailX said it would issue 240 million shares at 5c/share to satisfy the Plus SMS purchase, putting a $12 million price tag on Plus SMS. Its new investors also signalled then that they wanted to make a private placement of at least 30 million shares at a price of at least 5c/share (so at least $6 million) to fund Plus SMS’ operating costs.
The resolutions on Friday, paving the way for the changes, were to:
re-elect Jim Bracknell, David Stubbs & Jock Irvine as directors
approve acquisition of Plus SMS Ltd
approve issue of 240 million consideration shares
approve issue & exercise of 10 million 12-month options & 20 million 24-month options
approve issue of 32 million placement shares & 16 million stapled options
approve issue of 10 million placement options
ratify issue of 300,000 ordinary shares through a private placement
authorise directors’ remuneration of $110,000/year, and
adopt a new constitution.
RetailX’s collapse began when receivers were called into The Building Depot on 8 September 2004. RetailX managing director Mark Taylor, of Christchurch, bought the Building Depot chain of hardware outlets from Fletcher Building Ltd in 2003. The Taylor family also controlled Stirling Sports Franchises Ltd. Mr Taylor was adjudicated bankrupt on 17 May.
Auckland sharebroker Brett Wilkinson entered the picture in January, buying 19.31% of RetailX for $30,000 to keep the company alive. At the end of February, Mr Bracknell & Mr Stubbs were appointed to the board, Mr Bracknell as non-executive chairman.
Mr Stubbs was a director of Newcall Group Ltd, which Blue Chip NZ Ltd replaced on the NZX in June 2004, also through a reverse takeover. Mr Stubbs stayed on as a director, but faced a conflict of interest by becoming a business licensee and left the Blue Chip board in February. Mr Bracknell was Newcall’s managing director and remains a Blue Chip director.
In March, the reverse takeover of RetailX by Isle of Man company Plus SMS Ltd was announced, and in April Mr Taylor was replaced on the board by Auckland professional director Mr Irvine, who became Blue Chip’s chairman last October.
The links between Newcall/Blue Chip & RetailX/Plus SMS are not through corporate links but through Mr Bracknell, a Californian who came to New Zealand in 1998 when, he understood, this country’s telecommunications market was deregulated. He brought some Thai investors with him, turning the NZ Salmon Co Ltd into Newcall, succeeding with the minor parts of their business plan (an energy retailing business, sold to Genesis) but not with the New Zealand telecoms part of it because deregulation proved not to be as he’d thought it was. Mr Bracknell is also chairman of Selector Group Ltd, which bought direct marketing company New Image International Ltd at the end of last year.
At the end of Friday’s meeting, I asked Mr Bracknell & a couple of investors if the switch to a business based on text messaging & brands (called via text, such as health or medical messages, and music) was “off the wall”. One view, that it was “New Zealand’s answer to Google”, was considered by most to be excessively optimistic.
Mr Bracknell, the promoter of the new scheme, acknowledged that it would be a case of all or nothing, with the potential for extremely large gains versus not securing a strong market position, but less likelihood of a position in between.
“It’s not off the wall because – if you look at MSN (Microsoft NBC) – MSN are spending about $15 million/year in order to have a common number in 15 countries in Europe. We’re offering them (users) an opportunity to have the same number worldwide, and a short number,” Mr Bracknell said.
He said telecommunication companies would send the text messages – the opportunity was in the add-on of working with brands. “The whole infrastructure for what we’re doing is in place, it just hasn’t been used.”
Mr Bracknell told the meeting Plus SMS had secured numbers in 9 countries and had a target of 20-25. And he told me later he wanted the whole project carried out through a listed company to give it the credibility advantage of listing. Plus SMS Holdings, listed in New Zealand, would own the existing Plus SMS of the Isle of Man, through the reverse takeover.
At this point the new version of RetailX – Plus SMP – moves off my radar screen as a new-technology company rather than as a retailer or retail franchiser with property interests.
Earlier stories:
5 May 2005: Transition of RetailX continues
16 April 2005: Irvine replaces Taylor at RetailX
14 April 2005: RetailX fined $10,000 for slow disclosure
8 March 2005: Reverse takeover for RetailX
20 January 2005: Brett Wilkinson props up RetailX
2 December 2004: RetailX reports loss as talks on future continue
4 October 2004: Retail Services to be wound up, RetailX to stay listed & be sold
14 September 2004: RetailX trading suspension over, but future still fuzzy
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