RMG Limited Consolidating Strongly

Receivables management group RMG Limited (NZSE: RMG) has reported a period of accelerated consolidation for its first three months of trading as a receivables management company for the period ended 30 September.

Chief Executive Officer, Mr Paul Cooney, said there had been several acquisitions subsequent to the initial merger of 16 businesses in Australia and New Zealand to create the ASX and NZSX listed RMG Limited on 20 June.

“These additional businesses are also being rationalised and merged,” Mr Cooney said, “and already a number of the synergy benefits forecast in the Prospectus have been achieved, with 80% of office rationalisations completed.

“Sales revenue for the quarter was $A15,079,298 ($NZ19,617,779), with profits impacted by the merger and transaction costs associated with the creation of the new entity”, he said.

Mr Cooney said the consolidation process included the implementation of new solicitor arrangements, re-negotiation of supply contracts for key consumables.

Staff numbers had reduced from 657 at 1 July to 601 at the end of September, although it was expected this number would grow again due to the flow through of a high volume of work in progress.

“Collection work on hand totals in excess of $2billion, and the prospects for the sector for the coming year are consistent with our early forecasts,” Mr Cooney said.

“Settlement of the acquisition agreement with Credit Solutions Australia has now been reached, with integration planning well advanced.

“We are pleased to advise that Mr Bill van Poppel, former managing director of Credit Solutions, has been appointed executive general manager – operations for RMG Limited, the Australian receivables management company of the Group,” Mr Cooney added.

Other new appointments will include that of chief financial officer and chief technology officer both to take effect on 1 December.

The reorganisation of RMG Group’s management provides a clear focus of the three key areas for the company’s development in the region, through technology, experienced, competent and focussed operational management and accurate and reliable accounting controls.
In New Zealand, RMG acquired the business of Task Force Limited, an Auckland based collection company, who enjoyed a transferable government contract which was strategic to the development of Receivables Management (NZ) Limited. This business has been acquired on a scrip basis, with the shares valued at 38 cents NZ for the purpose of calculating the purchase price. Following Due Diligence, this contract became unconditional on Saturday November 11.

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