INVESTMENT SPOTLIGHT
LAVO™ Hydrogen Technology Limited
Renewables
LAVO™ is changing the way people live with energy. An Australian headquartered hydrogen technology and lifestyle company, LAVO™ designs and manufactures renewable hydrogen energy storage solutions for residential and commercial use. LAVO™ will challenge convention, spark a globa ...
l conversation and enable a meaningful change in attitudes and behaviours around sustainability, the environment and responsible consumerism. Founded in 2020, LAVO™ Hydrogen Technology Limited was established to fast track the commercialisation of technology developed within the Hydrogen Energy Research Centre cofounded by Providence Asset Group and the University of New South Wales.
LAVO has the first and only commercial-ready hydrogen energy storage system in the world designed for everyday use by residential homes and businesses. Set to be installation-ready in mid-2021, the LAVO System is designed to easily integrate with existing solar panels, creating a significant opportunity for LAVO to have an immediate and notable impact.
In addition to its equity investment, Gowings has also committed to purchasing more than 200 LAVO System units, which will be deployed across several Gowings properties. This includes its shopping centres, multiple of which already have solar panels installed, enabling it to run the centres greener while passing on energy cost savings to its tenants. Gowings is excited to add this innovative renewable energy company to its sustainability investment thematic.
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INVESTMENT SPOTLIGHT
SYMBYX Biome
Medtech
SYMBYX Pty Ltd is an Australian medical technology company developing Photobiomodulation (PBM) or cold laser therapies to manage previously intractable, chronic diseases and inflammatory conditions. The primary treatment route is via the gut microbiome, leveraging the increasingly well-researched li ...
nkages between the microbiome and various body systems, including the nervous system, heart, and kidneys. Parkinson’s and Fibromyalgia are current priorities and their PDCare 904 NM Laser is CE marked and ARTG listed for the reduction of the associated symptoms. Many forms of Parkinson’s are now known to commence in the gut with irritable bowel symptoms often preceding diagnosis by several years. SYMBYX is committed to developing effective, research-driven, non-pharmaceutical therapies for at-home use.
Their best-selling device during FY21 was predictably the PDCare Laser for a reduction in Parkinson’s symptoms. It was sold almost exclusively via the Company’s website and various social media platforms. In FY22 SYMBYX will invest in the increased optimisation of their eCommerce platform, targeted at increased website visitation, SEO, and growing their database. They also recently launched a Clinician Trial Program through registered Neuro Physiotherapists and early indications are positive. This program supports clinicians in an initial in-clinic trial period followed, in most cases, by a 30-day risk-free purchase by the patient of the PDCare Laser. Another key focus for SYMBYX during FY22 will be the launch of a new laser device to affect the gut microbiome. Gowings continue to believe in their long-term investment thematic.
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INVESTMENT SPOTLIGHT
Best & Less Group
Retail
Best & Less Group, made up of the brands Best & Less in Australia and Postie in New Zealand, is a retailer specialising in baby and kids’ apparel. The company generates 86% of revenue from its proprietary brands, all designed in-house. Its clothing is then distributed for sale across 246 p ... hysical stores and online. The group recorded unaudited sales revenue of $663 million for FY21. The group listed on the ASX on July 26th after a “successful public offering” in which the company raised $60 million on a valuation of $2.16 per share. Demand for its shares was “well supported” by institutional and retail investors and shares jumped to an intraday high of $2.31 after entering the secondary market. BLG remains well-positioned to capture long term market opportunity in the speciality value apparel market with its store footprint expansion, online growth, differentiated value proposition and focus on baby, kids, and women categories. Gowings are confident that this growth strategy will see success in time.
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INVESTMENT SPOTLIGHT
CannaPacific
Biotech
CannaPacific is an Australian biotechnology company with a focus on developing novel registered cannabinoid-based medicines for patients with unmet medical needs. CannaPacific is building a global therapeutic offering with an initial focus on palliative care and post-traumatic stress disorder. The ... ir 3 core business hubs are Pharma Development (rebranded to 3eD Pharma); Cultivation and Clinical engagement programs. During FY 21 their Pharma strategy hypothesis continues to be endorsed, they have made strong progress against focus areas of cultivation and are now looking to accelerate pharmaceutical development and ramp-up in cultivation in FY22. Their growth strategy is FY21 revenue $0.5m will grow to over $4m in FY22 and $9.6m by FY23. They are on track with raising $6m by 31Dec-21 on the way to a pre-IPO in FY22, applying for IP relating to Prescription Products, and currently have 10,000 sqm of outdoor CBD under cultivation. Gowings believes the exponential growth of the Medicinal Cannabis Industry in Australia will continue with some research sources predicting a growth rate of over 40 percent expected per year over the next five years.
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INVESTMENT SPOTLIGHT
National Stock Exchange of Australia Limited
Fintech
NSX owns and operates the National Stock Exchange of Australia; the second largest listings exchange in Australia. NSX is building an alternative exchange, creating a deeper, more liquid and a lower cost of raising capital. Gowings believes NSX has the potential to develop into a Tier 1 listings exc ... hange, providing strong growth by initially targeting lower market capitalisation companies and providing exchange services at lower cost. In May 2021 the Company announced that it had selected NASDAQ to upgrade the NETS Trading Platform, to be installed with the latest version of the NASDAQ Matching Engine (NME). This new platform will provide customers with many immediate benefits and provide a platform for future technological enhancements to power NSX as the second largest corporate listing venue in Australia. With a planned go live date of February 2022. The Company reported a $3m loss for FY21 closing the gap on previous years losses significantly, and with a strong forward pipeline of customers, an increased broker network of 120, the company is confident it will break even over the next financial year, moving into profit in FY23. Gowings continues to watch this holding closely.
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INVESTMENT SPOTLIGHT
Cobram Estate Olives
Food
Cobram Estate Olives is Australia's leading producer of premium extra virgin olive oil and Australia’s largest olive farmer. Boundary Bend produces Australia’s two top selling extra virgin olive oil brands, Cobram Estate and Red Island, and owns 2.4 million producing trees on over 6,575 hectares ...
of pristine Australian farmland located in the Murray Valley region of northwest Victoria. Additionally, Boundary Bend operates a bottling, storage and laboratory facility near Geelong and has groves, an olive mill, bottling facilities, laboratory and administrative offices in Woodland, California.
In FY21, the US Olive Oil business reported its first positive EBITDA result and $38.9m net sales, which is a growth of 29.9% on the prior year. Growth was driven by packaged goods, Cobram Estate sales up 57%, Private Label up 100%. The Australian olive oil business reported net sales down 8.6% on prior year due to lower oil supply but the record crop harvested in 2021 should support a return to top line growth in FY22. An investment in new plantings and the maturing grove profile also supports the expectation that the average EBITDA of the Australian oil division will continue increasing over time. The sales outlook is positive with increasing consumer demand for high quality extra virgin olive oil, a need that can be met by the 2021 Australian harvest. Cobram Estate Olives Limited (ASX: CBO), joined the ASX on August 11th 2021 providing investors with an opportunity to own a part of this great Australian food and agribusiness company. Refer to note 44 for subsequent events.
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INVESTMENT SPOTLIGHT
Five V Capital
Venture Capital
Five V Capital was set up and is managed by Adrian MacKenzie and Srdjan Dangubic, experienced Australian private equity and venture capital managers with whom Gowings has enjoyed a long relationship. Gowings have committed $1 million to Five V’s Fund II which has invested in leading businesses acr ... oss a range of sectors including healthcare, retail, media, consumer, technology, and financial services. Including brands such as Madman Entertainment, Canva, and Universal Store. The Five V focus is on businesses with an enterprise value of between $20 million and $200 million, where they can take a significant ownership position alongside their partners. The principals of Five V Capital have committed a substantial amount of their own capital to Fund II, driving the alignment of interests between the managers and investors. At the close of FY21, Five V Funds continue to be pleased by the ongoing performance of Fund II, with the remaining portfolio all having strong operational momentum and clear pathways to future liquidity events and they look forward to reporting on further progress on these exits over the course of 2021. Five V Fund III has in excess of $500 million of long-term capital available to partner with leading founders and businesses in Australia and New Zealand, bringing their total assets under management to more than $900 million.
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INVESTMENT SPOTLIGHT
Our Innovation Fund
Venture Capital
Our Innovation Fund is an early-stage venture capital fund that invests in Australian-based, early-stage, innovative technology businesses with the potential for high growth and attractive returns. The Fund is run by a team with decades of experience investing in and building technology businesses. ... The fund capitalises on the Australian Government's National Innovation and Science Agenda, seeking to stimulate the Australian innovation ecosystem with various grants and tax concessions. The fund currently has portfolio companies across sectors including enterprise software, hardware/devices, and financial technology. In FY21 results the Fund reports that all their companies have continued to grow revenues, attract and retain top-quality talent, build their products and add material value to their stakeholders over the last period. The value of the portfolio has increased over this period and the business was excited to see one of their portfolio companies, Go1, become Australia’s most recent ‘Unicorn’ – a private company valued at over $1 billion. They first invested in Go1 in 2017 at a valuation below $50 million. From a broader portfolio perspective, the Fund is currently tracking a return of approximately 2.8x invested capital. As the Fund is now in the ‘management phase’ of its lifecycle - as opposed to the investment phase - they continue to actively assist their portfolio companies to work through the inevitable ups and downs of early-stage technology companies, especially amidst such global instability. They also announced the imminent Final Close of Fund II at circa $100 million.
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INVESTMENT SPOTLIGHT
Carlton Investments
Listed Investment Companies
Carlton Investments Limited is a listed investment company, incorporated in 1928 and traded on the ASX. Carlton Investments’ strategy is to invest in established, well managed Australian listed entities that are expected to provide attractive levels of franked dividends and long-term capital growt ... h. Investments are held for the long term and are generally only disposed of through takeover, mergers or other exceptional circumstances that may arise. Carlton Investments do not act as share traders, nor do they invest in speculative stocks. Carlton Investments’ primary holding is Event Hospitality and Entertainment (34%) followed by substantial positions in the big 4 Australian Banks (17%) and further positions in BHP, AGL, and Wesfarmers. For FY21, Carlton reported a 44.8% decrease in profit on the prior year at $21m and it is anticipated that dividend revenue for FY22 will remain well down on the pre-COVID levels of 2020. But given the quality of the businesses in the portfolio it is expected that those impacted most by COVID-19 restrictions, such as Event will recover quickly once we see an end to those restrictions.
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INVESTMENT SPOTLIGHT
DiCE Molecules
Biotech
DiCE Molecules (DiCE) is a privately held US biotechnology company running a technology platform that began at Stanford University and has the potential to revolutionize small molecule drug discovery. Their business model includes the generation of milestone payments and royalty revenue through drug ...
discovery collaborations, alongside the monetization of its own drug development assets.
DiCE has been making great progress despite COVID-19 related challenges and now has an orally available drug candidate approaching clinical development, with strong potential for an efficacious and convenient oral treatment for psoriasis. DiCE is continuing work on their Sanofi-partnered immunology small molecule program which they are seeking to advance into preclinical studies and if these drug developments are executed successfully the potential payoffs are large. Gowings is excited to watch DiCE bring these products forward.
The company has at time of writing just finalised an IPO, listing on the Nasdaq and trading under the ticker DICE. The IPO was priced at USD$17 a share, subsequent trading has lifted it to USD$37 a share and with a market cap value over USD$1.2bn, DiCE has been marked as an ‘American Unicorn Company’. Gowings was a founding investor, holding shares since 2014 and the initial investment of USD$1.1m is now worth just over USD$6m, representing a significant return on investment. Refer to note 44 for subsequent events.
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INVESTMENT SPOTLIGHT
PowerPollen Accelerated Ag Technologies
Agritech
PowerPollen is an early-stage agricultural technology company based in Iowa, USA, that is working on advanced yield enhancement technology that enables higher yields in seed and grain production. PowerPollen has created a paradigm shift in agriculture by revolutionizing how plants reproduce, providi ...
ng unprecedented control of pollination that simplifies corn seed production while potentially enabling hybrid production and higher profits in current low profit crops like wheat. This break-through will increase farmer profits and global food supplies that are necessary to feed a population that is expected to grow to 9 billion by the year 2050.
PowerPollen recently secured a commercial licensing agreement with Bayer for corn seed production and completed a successful summer season working with Bayer to transfer and demonstrate the technology. They now have monetizable commercial agreements with most of the corn seed market. Adoption should begin to scale significantly in 2022 as the 2021 preliminary results look promising. In addition, research and development made significant advances for hybrid wheat and the collaboration with BASF is expected to continue into 2022.
In 2020, PowerPollen raised $13M with a goal of $18M in a Series B fundraise. In 2021, they have continued the series B raise at level terms and have now raised an additional $6M. As a part of this raise, PowerPollen has begun promoting its technology to improve farmer’s profits through greater corn yields and higher value grain differentiation via value added traits delivered through preserved pollen applications. Significant momentum for this value proposition is expected as plots from a 2021 demonstration are harvested, which should help drive a Series C fundraise in 2022.
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INVESTMENT SPOTLIGHT
Pacific Coast Shopping Centres
Retail Property
Our centres are well placed and continue to capitalise from the rapid economic growth and development currently being experienced in the NSW Mid North Coast region. Substantial ongoing government investment including the approved $1.8 billion dollar Coffs Harbour Pacific Highway Bypass Project due t ...
o commence later in 2021, combined with a large population surge due to increased work flexibility and other infrastructure investment including health services, flight schedules, educational facilities and growing employment opportunities means the future of the region looks bright.
We are pleased to report that despite the pandemic and associated lockdown challenges we continue to generate strong leasing interest and tenancy renewals across our regional NSW shopping centre portfolio and expect this momentum to continue. Centre foot traffic and retailer sales were strong over the period with many of our retailers trading at record levels particularly in the food, health, beauty, fitness, lifestyle, and fashion sectors. We expect this momentum in sales and leasing to continue to build, post the most recent July 2021 COVID-19 state lockdown.
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INVESTMENT SPOTLIGHT
Coffs Central Shopping Centre
Retail Property
During the period the leasing team were able to successfully renew a major anchor tenant and secure high-quality new retailers in the more challenging air-bridge space at rental levels above valuation including:
Hearing Australia, Shape 20, Fone Works
The leasing pipeline a ...
nd enquiry levels remains relatively strong with 3 new lease deals and 7 renewals currently being negotiated. The team is taking a highly selective approach and focusing on high quality operators to secure a leasing mix informed by retail industry trends to build upon our unique centre experience. On the development side we continue to explore further opportunities at Coffs Central including the DA approved hotel, rooftop apartments and office tower expansion.
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INVESTMENT SPOTLIGHT
Port Central Shopping Centre
Retail Property
Port Central continues to trade strongly and vacancies are at a minimum. During the period we secured BCU in a prominent street-facing site and we are negotiating lease deals with 3 new tenants. The renewals pipeline is strong with a major fashion offer renewing during the period and 10 renewals ...
relating to major retail groups close to finalisation.
The planned capital upgrade & reconfiguration of the upstairs food court into a mixed retail and dining offer are at the design and feasibility stage. We continue to work with local planning authorities to evaluate the redevelopment options available to amalgamate the centre with our adjoining site at 99 William Street.
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INVESTMENT SPOTLIGHT
Kempsey Central Shopping Centre
Retail Property
We are very pleased to report that the Country Universities Centre Macleay Valley (which was backed and supported by the Federal & NSW Government, CUC Central, Kempsey Shire Council, and Gowings Bros Ltd was opened officially at Kempsey Central in April 2021 by the Mayor and local Federal member ...
. CUC is a major strategic tenancy for the centre and has been hugely successful since its launch with 114 registered students, far exceeding the initial targets.
During the period we secured long-term renewals for two major strategic tenants and secured one new tenant to the centre.
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INVESTMENT SPOTLIGHT
Sawtell Commons
Development
Completion of the Stage 2 works sees 20 of the 220 Sawtell Commons residential lots constructed and registered for sale or development. Sale prices for the stage 3 release of 56 lots are being reviewed but to date, pre-sale interest has been strong with 11 holding deposits received at an average of ... $325,000 per lot. Stage 3 subdivision works have commenced with Registration for stage 3 expected around the end of March 2022.
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INVESTMENT SPOTLIGHT
Solitary 30
Development
The Jetty development site located at 357 Harbour Drive paves the way for an exciting new mixed-use development for Gowings. The site has now been demolished and some of the historic and original timber elements of the Forestry Building have been re-purposed at the new Gowings Head Office located on ...
level 3 of the Gowings Building on Harbour Drive in Coffs Harbour. Various Architects have presented several concepts for the site and are we continuing to work on finalising a preferred development design.
Consultation with Coffs Harbour City Council regarding the potential transfer of ownership of the parcel of land adjoining the road continues, however, the design option being developed will allow for, but not rely on the transfer of the land.
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