The Deepverge PLC (LON: DVRG) share price surged 10.8% after announcing an accelerated restructuring process. Its Modern Water division will focus its marketing efforts on South East Asia, China and EMEA markets.
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On the other hand, the Labskin and Skin Trust Club businesses focus most of their efforts on the North American markets, given their recent regional successes. The change in strategy was informed by the demand for the products and services offered by each business unit.
The Modern Water division has won several contracts exceeding £1 million in China and South East Asia after transitioning its operations into a fully integrated solution sales business from a traditional seller of standalone water monitoring units over the past two years.
The company’s success in South East Asia, China and EMEA has informed the decision to focus on these critical markets where demand for Modern Water’s services is pretty high. The same reasoning applied to the Skin Trust Club and Labskin businesses.
Soon after the Skin Trust Club’s launch in the United States, there was significant demand for its services, which has led to today’s decision to focus on the North American market. The two businesses will be transferred to Rhinocloud Limited, which Deepverge acquired in 2019.
Rhinocloud is a software and AI business that uses AI to analyse microbiome data collected from human skin and the environment, including solid, water, fauna and flora. The recent material wins secured by Labskin and Skin Trust Club, including NOAA, IARPA and Georgia Ports, have influenced the decision to focus on the North American market.
Investors cheered that the business restructuring would save Deepverge up to £2 million in operating costs annually, yet the entire process cost would not exceed £0.2 million.
Deepverge also told investors it had transferred the funds raised in October to Riverfort to settle the outstanding amounts borrowed under the loan facility. The company raised £10.0 million via an oversubscribed placing and subscription from institutional investors in October. The firm also raised £2.5 million via a broker offer to retail investors.
Deepverge shares have fallen 91.45 this year amid a broad market selloff and look quite attractive at current prices.
*This is not investment advice.
Deepverge share price.
The Deepverge share price surged 10.77% to trade at 2.160p, rising from Monday’s closing price of 1.950p.