Is Plexure the next rising star on the NZX, ready to follow the trajectory of Xero?
It’s a mobile marketing company, using an intelligent technology platform which powers customers’ mobile marketing activities. The platform incorporates Artificial Intelligence (AI) and Machine Learning (ML) features which augment Plexure’s capabilities in the areas of personalisation, advanced analytics and platform security.
Plexure’s trading performance has improved dramatically. Customer usage is at record levels and accelerating with 30m new users downloading its apps. This has driven revenues to a new high of $16.9m for the year ended March 31, when it had $7.3m in the bank.
Revenue guidance for the current year is in a range from $21m to $23m. By comparison with the FY19 revenues of $16.9m, this represents a 24.3% rise at the lower end of the range and a 36.1% rise at the upper end of the range.
Confidence in the business has been matched by its major customer, McDonald’s, which shortly after balance date purchased a 9.9% equity stake in the company at a premium to the then current market price.
Plexure chairman Phil Norman says this strategic investment by McDonald’s will assist Plexure develop its offerings and market presence for McDonald’s and other customers.
Opportunities available to the company are growing and Norman told the annual meeting last week the board will use its increased cash resources, (which totalled $12.7m immediately post the McDonald’s investment) to develop its sales and marketing capability, product roadmap, technology platform, and explore potential acquisitions.
Plexure’s platform is now one of NZ’s largest cloud-based technology platforms. It has around 140m end-users on the platform in 55 countries, a 43% increase in the last 12 months. It is at present delivering about 190m push messages per month in 78 different languages.
Norman reports API calls per month have now reached a staggering 9.2 billion.
“These usage statistics are impressive and demonstrate the robustness of our platform and its capacity to perform at scale. Our technology roadmap anticipates continuing strong usage growth and this will require ongoing investment in our platform to ensure that we can handle much higher transaction volumes, while also adding new products and services.”
This platform investment will significantly reduce the “cost to serve” for end-users in the future and is an essential element of the growth strategy as the company builds capability to support end-user numbers approaching 500m.
Norman says the investment will have an impact on the financial results in FY20 and FY21 and consume some part of available cash reserves.
“The company’s goal is to be a world leader in the mobile application software sector and the investment by McDonald’s is a solid validation that we are well on the way to achieving this goal.
“We anticipate deepening our relationship with McDonald’s,which will see us offering additional products and services to them in currently served and newmarkets. Our new business pipeline has also grown significantly in recent months and we look forward to securing new customers in a variety of categories in FY20.
“As most of these are in the US, we will be increasing our presence in that market in the coming months in order to close as many deals as possible.”
Norman points to key competitors also expanding rapidly, in particular investing heavily in the acquisition of new customers and broader product sets.
He says Plexure cannot afford to be left behind and given the cash resources the company now has available, the board may also consider acquisitions to accelerate its organic growth strategy, secure new technologies or source pools of talent.