TIDMALT
RNS Number : 2906Z
Altitude Group PLC
14 December 2017
14 December 2017
ALTITUDE GROUP PLC
(the "Company" or "Altitude")
AiM progress update, launch of online aggregator
"AndEverything.com" and 2017 trading update
Altitude Group plc (AIM: ALT), the operator of a leading
marketplace for personalised products, is pleased to update
shareholders on progress made as we head towards the end of the
financial year.
We have had a very busy period following the appointment of
Nichole Stella as President US Operations and the publication of
the half year report in September, and look to enter the New Year
with a great deal of positivity and confidence.
AiM progress update
As stated in our half year report, we have increased focus on
our partnership with AiM as the quickest route to significant
revenue having enhanced the enterprise partnership agreement with
AiM, to provide members with a combined Channl ecommerce platform
together with Altitude's full cloud based CRM and order management
system.
Having created approximately 1,400 Channl sites for AiM members,
and appreciating the need to train and engage with members to drive
their use of the platform, we have accelerated investment into the
US to provide Nichole with the resource to begin "on boarding" AiM
members. With the knowledge that the fast growing AiM group (over
100 new members and circa $80 million of revenue added in the last
quarter), who execute more than $1.3 billion of annual revenue,
will utilize our processes to transact all orders, we have now
integrated both our ecommerce (Channl) and cloud based legacy order
processing applications to capture all orders. We have branded the
integrated platform as "AiMPro".
AiMPro is a full cloud-based business management platform that
features full CRM, enterprise e-commerce websites, company stores
and instant websites. All merchandise on the platform will utilise
our unique and patent protected design and productions software
Artworktool. The provision of this full product suite is a member
benefit to AiM members and is provided free of charge to them.
AiM suppliers
Suppliers have shown great enthusiasm for the launch of the
AiMPro platform and at the prospect of gaining increased exposure
to the largest and fast growing distributor Group in the US. To be
competitive and retain access to this member group, AiM preferred
suppliers are showing that they are willing to contract to pay
differential percentage based transaction fees to Altitude on both
online and offline orders. Online orders will still command higher
Channl levels of gross transactional revenue.
To that end we are delighted to announce that we have agreed
terms with two of the top 50 AiM preferred suppliers in the last
week and anticipate many more suppliers will be added during Q1 of
2018. These suppliers will be integrated within AiMPro on a
percentage of transaction basis. Contracting with the suppliers in
this way means that we potentially have access to gross
transactional revenue ("GTR") across the whole of the AiM revenue
base once the throughput is captured in AiMPro. We expect that,
over time, AiM members will inevitably and increasingly migrate to
online trading via the ecommerce (Channl) platform embedded in
AiMPro and as they do this Altitude's GTR% will increase.
AiM members
Initial marketing of AiMPro to the first 40 AiM members
("AiM40") in November highlighted that AiM members are very keen to
adopt a single solution that addresses all of their operational and
e-commerce needs. On 16 November 2017 we hosted a fully attended
and very well received introductory webinar to the AiM40 and we
have a team based in Philadelphia who, supported by the UK, are
fully engaged in on-boarding and training the AiM40.
Execution of the on boarding process will be of paramount
importance to the success of our partnership with AiM and to the
speed at which members can engage with the AiMPro platform. The
team in Philadelphia have been hired and trained to initially focus
on the on-boarding of the AiM40. On 16 January 2018 the wider roll
out to more AiM members will launch at the PPAI EXPO in Las Vegas.
Nichole and her team will present to more than 300 AiM members at
an invitational reception at PPAI EXPO, and will then provide two
separate 2 day sessions focussed on on-boarding members. Currently
there are more than 200 AiM members have registered for the on
boarding sessions at the EXPO.
Following the PPAI Expo in Las Vegas, the Company will execute a
strategic on boarding and education campaign to AiM members
throughout 2018. A programme of online training/webinars will be
offered and the Company will undertake a 60 day AiMPro roadshow
tour to various cities across the US to deliver on-boarding
sessions directly to those AiM members not able to attend the Las
Vegas EXPO.
AndEverything.com
We are also delighted to announce the launch of our online
aggregator or market place called AndEverything.com ("AE"). It will
be fully supported by search engine optimisation activity.
We believe that AE is the only comprehensive promotional
products aggregator and market place in the world, and will enable
any promotional product distributor to be listed and "found" by end
users searching and browsing the internet for promotional products,
including B2C as well as B2B.
AE provides the end user with the unique full Channl experience,
enabling them to upload their brand logos, fully personalise the
print area, produce production ready artwork, and then finally
select a preferred price, distributor, location and delivery time
from the selection of registered members and competitive pricing,
then purchase and checkout. It is a complete online purchasing
experience without the need for human interaction or artwork
proofing, designed very much as an Amazon style experience.
AE has been "soft" launched in the UK, initially with 20
registered distributors and will be available in the US by the end
of the month ahead of a formal launch at Altitude's national UK
trade show "PPD Live" at the Ricoh Stadium, Coventry, and the
national US PPAI EXPO in Las Vegas, both of which are being held on
16 January 2018. An AE listing will also be made available to AiM
members as an added value benefit.
The board believe AE is highly complementary to our current
offering and the wider business strategy and effectively completes
a circle of products which will enable any distributor to truly
trade online, and Altitude to potentially monetise every part of
the supply chain. Altitude technology can now provide any
distributor with:
-- a free unrivalled ecommerce Channl trading platform for each
of their customers complete with a supply chain built-in;
-- a free and comprehensive order management system for offline orders;
-- a route to additional online orders via listing on AE; and
-- the ability to be found online by promotion of AE through search engine optimisation
AE is not provided free to distributors. There is a monthly
subscription fee and sales commission payable in respect of orders
placed with the distributor. An AE listing will be offered free to
AiM members after a qualifying period of proven throughput across
AiMPro, though additional sales commission charges will apply.
We are very excited by the launch of AE and believe it has
enormous potential to generate shareholder value in its own right.
An order was generated on the first day of "soft" launch in the UK
without any promotion, and we have already received very positive
feedback from the initial distributors.
Ad Products.com Limited ("ADP")
The acquisition of ADP in June of this year is progressing well,
although the unfortunate four week delay caused by the vendor's
bank in the completion of the deal meant that we missed the
additive benefits of that period's revenue (circa GBP400k that we
otherwise would have received), as well as the causal knock that
the delay had on our plans to reorganise the business.
We are however now very pleased with the contribution that ADP
is already making versus the price paid and the speed with which we
have integrated the ADP business and increased efficiency.
Conclusion
Based on the high level of engagement of AiM members and
suppliers and the sheer size of the AiM opportunity, the board are
confident that our strategy of getting the combined technology
foundations absolutely right and focussing resources on AiM
on-boarding as our main and quickest route to significant
monetisation, is correct.
A significant focus on the execution of the enhanced AiM
agreement will, as we continue to execute as planned, allow us to
capture more of their value chain and faster. AiMPro will provide
Altitude with immediate access to monetise offline as well as
online orders, which will apply across the majority of the huge
$1.3 billion of combined AiM membership revenue. This is evidenced
by the willingness of AiM preferred suppliers to pay differential
percentage based transaction fees for inclusion on AiMPro.
The decision to focus and invest in the people and technology
required to deliver the AiM growth opportunity in the US has
marginally impacted revenue expectations in 2017]. The profit,
despite the lost contribution attributable to the delay in
completion of the ADP acquisition and the significant investment in
the US, remains broadly in line with market forecasts. The momentum
in the US confirms that the decision in this financial period to
strengthen our technology and recruit a US team to work under
Nichole's leadership was absolutely the correct course of
action.
Our newly launched online aggregator, AndEverything.com, is the
final piece of the jigsaw which ensures that Altitude can monetise
every part of the supply chain and thus access a significant and
growing share of the value chain as the promotional products
markets in both the US (circa $23 billion) and UK (circa GBP1
billion) inevitably migrate online. We believe AndEverything.com
will become a significant business in its own right and enhances
and complements our "free" Channl ecommerce and combined AiMPro
trading platforms. It is a very exciting and significant
development to see AE launched in the UK with the US to follow very
soon.
The pipeline of enterprise opportunities is growing and we are
engaged with several who, in terms of party and scale, would be as
endorsing of our full customer proposition as the enhanced AiM
agreement is. We are hopeful of converting these opportunities and
will update the market at the appropriate time. As such, the board
looks to the future with confidence.
Enquiries:
Altitude Group plc
Peter Hallett, Executive
Chairman 07887 987469
finnCap ltd 020 7220 0500
Jonny Franklin-Adams (Corporate
Finance)
Scott Mathieson (Corporate
Finance)
Richard Chambers (Corporate
broking)
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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