(Alliance News) - Entertainment company Immotion Group PLC said on Tuesday it is proposing a share placing and a subsequent broker option to raise GBP2.5 million.
The raise will fund the roll-out of a new strategy centred on its virtual reality partnerships.
Immotion will raise GBP2.0 million through the placing of 29.6 million shares at 6.75 pence each, and joint brokers WH Ireland Ltd and Alvarium Capital Partners will raise an extra GBP500,000.
The broker option will offer 7.4 million shares at the same price and is expected to close on Tuesday.
Shares in Immotion were down 15% at 6.70 pence each in London on Tuesday.
The roll-out of the company's partnership model allows Immotion to install its virtual reality products in "high footfall leisure destinations" like London's O2 and Glasgow's Soar Centre, it said.
Immotion said this new strategy will help the company build a "recurring revenue stream" and allow the group to breakeven earnings before interest, tax, depreciation and amortisation.
The company said it will break even in Ebitda once 410 headsets are installed, and Immotion expects this to happen in the first quarter of the 2020 financial year. Immotion did, however, concede it expects lower revenue in the 2019 financial year as a result of the new strategy.
Chief Executive Martin Higginson said: "Creating a partnership solution where we work together with high footfall leisure locations to provide them with not only a new and interesting attraction, but also a valuable ancillary revenue stream has transformed our business.
"Our continued focus in creating not only the right environment as well as VR experience for our partner, is starting to show encouraging signs with revenues in our partner estate growing strongly."
