Doubles New Business Pipeline to $128m
Sydney, Oct 4, 2016 AEST (ABN Newswire) - Brand Protection and Customer Engagement solutions company YPB Group Limited (
ASX:YPB) has released an updated company presentation as it introduces the company to investors in Asia and the USA.
- Revised data on new business pipeline
- Condensed presentation released for offshore investor roadshow
- New business pipeline value has doubled since May
New information in the presentation relates to an updated snapshot of the new business pipeline, with commentary provided below to help interpretation of the data.
The primary observation is that the value of the new business pipeline has effectively doubled since May 2016. The key data are:
- The total value of all pipeline opportunities has grown from $60m in May to $128m in September.
- The value of Advanced Opportunities has increased from $38m to $65m.
- The value of Intermediate Opportunities has increased from $23m to $64m.
In Advanced Opportunities, the $27m increase in pipeline value has resulted from either projects already in this group upscaling in value, or new high value projects being added. There have been changes within the group as some projects have been deferred due to client requests, therefore moving these to Intermediate Opportunities, while various new projects have been added. The total number of projects in Advanced with value >$0.5m has fallen slightly from 18 to 16. This reflects the deferrals noted above and also the refinement of focus towards higher value projects with a higher probability of closure.
The biggest change in the data is the number of < $0.5m individual Advanced projects falling substantially from 178 in May to 34 in September. This is the result of a deliberate business development refocus and reprioritisation of effort. Importantly, the total value of Advanced projects in the < $0.5m category has risen from $7.5m to $10.6m, with average value per project rising from $0.043m to $0.31m. Appropriately, the potential reward to sales-effort ratio is now much more favourable.
The total value of Intermediate projects has risen by $40m. This has largely been driven by high value projects increasing by $26m, with the number and value of Intermediate projects increasing across all categories. In contrast to the fall in the number of Advanced projects at < $0.5m as noted above, the number of individual Intermediate <$0.5m projects has risen from 12 to 30. In addition the value per project has risen from $0.069m to $0.29m with the total value increasing from $0.8m to $8.8m.
The value bands used to present the data have changed as a result of an increase in the number of higher value projects. As inferred above, there has also been movement of projects between each value band as well as both directions between Advanced and Intermediate stages. These changes have largely been driven by timing and focus of the target client.
YPB also notes that the data in these tables indicates potential annual revenues from prospective clients. In the event of all Advanced projects concluding successfully, YPB would have annual revenues on a run-rate basis of $65m. Should all Advanced and Intermediate projects conclude successfully then this would increase to $128m. These statements are made for clarity of interpretation of the data but should not be taken to mean that YPB expects, nor is it forecasting, those revenues or the successful completion of all projects in the pipeline. Rather, the data offers the market quantitative insight into the rapid progress of the business prior to such progress becoming apparent in the company's financial statements.
In summary, the pipeline data demonstrates significant progress in new business development. It implies that both the effectiveness of resource use and the probability of successful conclusion have risen following greater focus and the deferral or culling of less valuable prospects. Management is both eager and prepared to commence all contracts immediately but patience is required in the contractual process. Despite that reality, YPB's expectation is unchanged that valuable contracts with prominent clients will be concluded in Q4.
The growth in the pipeline and the progress to contract closure of specific projects underpins the company's key financial milestones for 2017 as previously released to the market, those being a breakeven position by end March 2017 and profit before tax of $5m for 2017 (year-end December).
YPB Executive Chairman John Houston said: "Our strengthened executive team, led by CEO Jens Michel, has built a revenue and business pipeline which has grown strongly since May this year. YPB has never been in a stronger position to perform."
To view the latest presentation, please visit:
http://abnnewswire.net/lnk/QOJA5J3M
About YPB Group Ltd
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