12/10/2016 - 15:31

Riders Choice, Cycliq hit issues

12/10/2016 - 15:31

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Two well-known Leederville cycling businesses have hit differing problems this week, with retailer Riders Choice going into voluntary administration and accessory manufacturer Cycliq facing a regulatory speed bump on its path to an ASX listing.

Riders Choice in Leederville has gone into administration.

Two well-known Leederville cycling businesses have hit differing problems this week, with retailer Riders Choice going into voluntary administration and accessory manufacturer Cycliq facing a regulatory speed bump on its path to an ASX listing.

The directors of Riders Choice appointed KordaMentha as voluntary administrators yesterday, about two weeks after its stock was removed from its Oxford St store by a supplier.

Riders Choice had been trading for 14 years, originally as a multi-brand retailer, but in recent times had specialised in selling only Trek bicycles and accessories, manufactured by US company Trek Bicycle Corporation.

It was a highly-regarded business with a Facebook customer rating of 4.8 out of 5.

The business was understood to have been adversely affected by tough retail trading conditions, including discounting by other retailers and competition from internet sales.

It previously had a second store in the Perth CBD, but that was closed early this year.

Its directors were Phil Reimann and Ashley Maher, while a third director, Gary Suckling, left one year ago.

In a Facebook post on Monday, the directors urged customers to support local stores.

“In these tough times its great knowing that our competitors have got our back, so please support your local,” the Facebook post stated.

“Thank you to the shops that are posting free and discounted servicing for all RC customers.”

KordaMentha partner John Bumbak said the business was temporarily closed, pending the outcome of discussions with Trek.

Meanwhile, the corporate regular has put up a speed bump in the path of Cycliq, which has been pursuing a backdoor listing on the ASX via a reverse takeover of Voyager Global Group.

The listing process included a public share offer to raise up to $5 million, led by Merchant Capital Markets.

Voyager told the ASX yesterday the Australian Securities and Investments Commission has placed an interim stop order on the company’s prospectus.

ASIC had raised concerns in relation to certain disclosures in the prospectus, Voyager said in a statement.

Voyager director Piers Lewis told Business News additional information and disclosure was readily available and was currently being compiled.

“We anticipate being able to respond to ASIC well within the required timeframe,” Mr Lewis said.

“Once the additional prospectus information has been lodged, the company expects to close the offer and be trading on the ASX.”  

Voyager said yesterday there had been a very high level of interest in the public share offer.

“To date, Voyager has received significantly more demand to the share offer than the company intends to raise,” it said in a statement.

Cycliq specialises in the design and manufacture of camera/light combinations for cyclists, which are sold in 25 countries.

The company believes it is the number one brand in high definition camera and light combinations, according to the prospectus.

The prospectus disclosed that Cycliq has achieved rapid growth in sales over the past two years, with revenue hitting $2.3 million in the year to June 2016.

The business has also experienced big increases in distribution, operating and staff expenses, and as a result its net loss has increased to $1.5 million.

The prospectus also disclosed that Voyager’s directors took account of Cycliq’s internal revenue and profit forecasts when they determined the purchase price for Cycliq.

It added the forecasts could not be stated publicly as they do not comply with ASIC guidelines.

Cycliq is led by chief executive Andrew Hagen and chief operations officer Kingsley Fiegert, while the company has recruited Chris Singleton as its incoming chairman.

 

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