Plexure accelerates growth and focuses on US expansion

Mobile engagement software company Plexure has continued its aggressive growth, with revenue increasing 45% to $11.8m for the 6 months ending 30 September 2019. Cash at bank increased 121% to $13.6m over the same period and includes a $5.4m investment from McDonald’s earlier in the year, in return for a 9.9% stake in the NZX-listed company.

Plexure plans to use these reserves to further accelerate sales growth in the US and will be investing in sales, marketing and product development to drive this outcome. There will also be ongoing platform investment to build capability to support up to 500 million end users.

Chief Executive Craig Herbison says the Company is committed to enhancing its offering and is now in a prime position to execute for growth.

“We continue to roll out Plexure globally, and we will be investing in technology and people to make sure we can support escalating transaction volumes and new customers while continuing to innovate.

“We have developed a range of new products including AI-enabled fraud detection, offer engagement, price optimisation and advanced analytics tools, and anticipate launching more innovative AI driven capabilities in the coming months.

“Plexure is now firmly in the growth phase and we will be looking at investment and expansion opportunities, particularly in the US market,” says Mr Herbison.

Summary of Financial Performance

First half highlights

On 2 April 2019 McDonald’s purchased a 9.9% stake in Plexure for $5.4m, reflecting the importance of Plexure’s platform to the brand’s digital marketing activities.

In July 2019, Plexure signed a deal with US burger chain White Castle, which has 400 restaurants across 13 states. Under the terms of agreement, Plexure will provide mobile engagement and loyalty capability through its intelligent marketing platform, helping White Castle strengthen its position in the US.

Plexure now has one of New Zealand’s largest cloud-based technology platforms. The platform’s end-user count has increased 33% over the last 6 months, reaching 146 million end-users in 58 countries. Plexure currently registers 9.2 billion API calls a month, delivering 190 million push messages in 78 different languages.

Outlook for full year

Plexure has aggressive growth targets in the US. With a substantial new business pipeline, the Company will be funding an increased presence in that market in the coming months.

Mr Herbison says international expansion opportunities will drive Plexure’s growth strategy going forward.

“The global mobile marketing sector is growing year on year and is currently estimated to be worth over US$53b in 2018 and is growing at a CAGR of 23% from 2019 to 2025. The US market is worth around 41% of this so we are positioning ourselves there to capture this growth.

“As most of our new business pipeline is in the US, that market is the major focus of our expansion strategy. We will be building out our sales, marketing and consulting capabilities in the US in order to work more closely with prospects and clients,” says Mr Herbison.

Plexure is forecasting revenue for FY20 between $21m and $23m, representing a 24.2% to 36% uplift over FY19’s revenue of $16.9m. As the Company is currently exploring options for expansion and investment of its cash reserves, there is no EBIT guidance at this time.

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