FBR Limited (ASX: FBR) has launched an $8 million fully underwritten Share Purchase Plan (SPP), allowing eligible shareholders to buy shares at $0.038 each, a 11.6% discount from FBR's closing price on 31 October 2024. This offer, open from 7 November to 26 November, will provide the company with essential working capital to accelerate key projects, particularly its ten-home Demonstration Program in Florida, which may catalyse a U.S. joint venture option with CRH Ventures, potentially unlocking a substantial purchase order and financing arrangement.
Strategic Use of Proceeds for U.S. Market and Technology Development
The funds from the SPP will bolster FBR's ongoing U.S. Demonstration Program with CRH Ventures, a crucial step in commercialising FBR’s Hadrian X® bricklaying robot. This program has already demonstrated FBR’s technological prowess, with five homes successfully constructed in Fort Myers, Florida, for builders New Century USA and Christopher Alan Homes. This milestone validates Hadrian X®’s operational readiness in a new international market, marking a critical step in FBR’s path to becoming a major player in the automated construction industry.
The outcome of the Demonstration Program holds potential high stakes. If successful, FBR’s joint venture option with CRH Ventures could lead to a purchase order for 20 Hadrian X® robots, alongside a US$40 million debt facility from CRH Ventures Americas to fund the venture. According to FBR, this financing could serve as a springboard for its ambitious expansion in the U.S., aiming to address the housing sector's need for scalable, sustainable construction technologies.
Recent Financial Moves and Operational Achievements
The SPP comes shortly after FBR’s institutional placement in August, which raised $12.5 million, demonstrating strong support from new and existing investors. This capital has been instrumental in funding FBR’s domestic and international operations, including the substantial $1.2 million invested in the U.S. Demonstration Program during the September quarter.
The latest quarterly report also highlighted several financial and operational benchmarks:
- Revenue Generation: FBR recorded customer receipts totalling A$1.3 million, bolstered by a US$600,000 option fee from CRH Ventures following the successful Site Acceptance Testing of the Hadrian X® robot in Florida.
- Cost Management: The company managed a 33% reduction in payroll and corporate costs from the prior quarter, contributing to a closing cash balance of $10.2 million.
- Project Expansion: Beyond Florida, FBR's Perth team completed its Hadrian X® work on an eight-townhouse development in St James, Western Australia. FBR has also signed an agreement with PulteGroup, the third-largest homebuilder in the U.S., to construct demonstration homes, further expanding its stateside footprint.
The Path Ahead for FBR and the Hadrian X®
FBR’s pursuit of transformative construction technology through the Hadrian X® aligns with a global trend toward automation in construction, a sector traditionally slow to innovate. With FBR’s Dynamic Stabilisation Technology® at the core, Hadrian X® constructs structural walls efficiently and with reduced waste, offering builders a unique “Wall as a Service®” on demand. This capability has proven particularly valuable in regions like Florida, where hurricane-resistant construction is essential, as evidenced by the Hadrian X® homes withstanding Hurricane Milton unscathed.
According to FBR’s Investor Relations Manager, Andrew Edge, the expansion into the U.S. represents a significant growth opportunity for FBR: “The Florida Demonstration Program has been a robust validation of our technology’s resilience and adaptability in a competitive market. Our goal with the SPP is to ensure we have the capital to seize on these emerging opportunities and potentially cement a valuable U.S. partnership.”
Timeline and Shareholder Eligibility for SPP
Key dates for the SPP include:
- SPP Offer Opens: Thursday, 7 November 2024
- SPP Offer Closes: Tuesday, 26 November 2024
- Results Announcement: Friday, 29 November 2024
- Share Allotment and Trading Commences: Wednesday, 4 December 2024
To participate, shareholders must have a registered address in Australia or New Zealand as of the record date on 1 November 2024. The plan allows eligible shareholders to acquire between $1,000 and $30,000 worth of shares, fully underwritten by Bell Potter Securities with institutional sub-underwriters. Given the tight timeline, FBR has noted that it reserves the right to close the offer early if oversubscribed.
The launch of FBR’s fully underwritten SPP underscores the company’s commitment to building its U.S. market presence and advancing its automated construction technology. With the upcoming SPP, FBR is signalling its confidence in both the Hadrian X®’s potential and the high-value opportunities emerging in the U.S. construction industry. Investors will have the chance to support this expansion and participate in a transformative period for FBR as it lays the groundwork for scaling its operations on a global stage.
