HotCopper Holdings Limited (ASX: HOT) (HotCopper or the Company) is pleased to announce that it has entered into a partnership agreement with Big Review TV Ltd, a subsidiary of ASX-listed BIG Un Ltd (ASX:BIG, market capitalisation $375 million). Under the agreement, the parties are to market a dual product offering pairing HotCopper’s Corporate Spotlight package with a branded BIG Finance video licensing package.
BIG is a social media video review platform. BIG are innovative disruptors in the online video space delivering subscription based video technology products and services. In particular, Big Review TV’s B2B service provides on-site, low-cost video content licensing and online marketing services to small and medium-sized enterprises. The Company has operations across Australia, New Zealand, the United Kingdom, the United States, Hong Kong, Singapore and Vancouver and was listed on the ASX in December 2014.
The BIG/HotCopper package will provide ASX-listed companies with a specialist BIG Finance video licensing package via subscription over a twelve month period, distributed to HotCopper’s audience of 700,000 investors per month through companies’ Corporate Spotlight. The joint package will be aggressively marketed to the parties’ respective client databases using a combination of BIG and HotCopper’s sales resources and revenue split accordingly. With more than 2,200 companies listed on the ASX, the revenue opportunity for both companies is significant and the package can be provided under both companies’ existing cost structure.
The Product - An effective and targeted investor relations channel
Corporate Spotlight is HotCopper's new, direct-to-market channel for ASX-listed companies to engage with their most-interested investors and boost their investor relations efficiency. As well as providing valuable insight into performance analytics, the Corporate Spotlight offers ASX-listed companies the opportunity to showcase investment highlights and connect with their most engaged investors. The Spotlight is the first thing investors see when searching a company.
The Engagement Rationale - Investors have moved online
Australians are increasingly applying a 'do-it-yourself' approach to investing, with 58% of retail investors trading through online brokers such as CommSec or E*Trade, and a growing number of SMSFs (577,000+) managing over $620 billion in assets. A large portion of these investors use HotCopper when researching and making investment decisions, and Corporate Spotlight will allow companies to reach the investors who are most interested in their investment proposition.
Q1 FY18 Result
Receipts from customers of $1.17 million
Unaudited profit before tax of $285,000
Release of HotCopper iOS app to the iTunes Store
$2.72 million cash on hand at 30 Sept 2017
Based upon unaudited management accounts, the Company recorded sales revenue of $1.02 million in the September quarter, up 11.5% on the prior corresponding period. In addition, the Company achieved an unaudited net profit before tax of $285,000.
The Company is cash flow positive, with operating cash flow of $150,000 during the September quarter and has a cash balance of $2.72 million. Operational expenses were higher during the reporting period, in part due to external costs associated with the development of the HotCopper iOS app and Corporate Spotlight service updates.
Release of iOS App
On the 26th July 2017, the Company released its iPhone app to the iTunes Store. The app is designed to provide an enhanced user experience for the significant number of HotCopper members that access the site from an iOS device.
To date, user growth to date has been primarily organic with approximately 11,500 downloads. In the period since the app’s release, relevant user engagement indicators (including session duration, screens/session) suggest the app is generating higher engagement levels than the HotCopper mobile responsive site.
Subsequent to the initial release of the app, it has been updated five times to provide additional features for members and improve stability. The Company intends to promote the app further in Q2 FY18 to accelerate user uptake.
During the quarter, the Company engaged user experience consultants to advise on a re-design of both its desktop and mobile responsive sites. The project has involved significant feedback from new and existing HotCopper users, as well as stakeholders including the Company’s advertising partners. Though the current website is fully functional, there is significant potential to better serve current members and attract new users through an enhanced user interface. In addition, the re-design should enhance the profitability of the site through optimized advertising placements and set the foundation for the site to grow in the future.
The re-design will take place over the medium-term and the Company will update the market accordingly.
Alec Pismiris Non-Executive Chairman
Alec has over 30 years’ experience in the securities, finance and mining industries, having served as a director and company secretary of various ASX listed companies as well as many unlisted public and private companies. Mr Pismiris holds a Bachelor of Commerce degree from the University of Western Australia, is a member of the Australian Institute of Company Directors and is an associate of the Institute of Chartered Secretaries and Administrators.
Colin Chenu Non-Executive Director
Colin has 30 years’ experience in private legal practice, during which he has advised and represented clients on a diverse range of legal areas in both litigious and non-litigious work, including corporations, trade practices, contracts, equity and trusts. He has extensive experience in defamation law and reputational torts and was recommended in Doyles’ List of Leading Commercial Litigation and Dispute Resolution Lawyers in 2016. Colin is currently a director and part owner of prominent Perth-based corporate and commercial law practice, Bennett + Co.
Gavin Argyle Non-Executive Director
Gavin is an experienced senior executive, with over 30 years’ experience in Australian capital markets. In 2006 he co-founded Capital Investment Partners, a Perth-based investment bank providing capital raising and corporate advisory services to small and mid-capitalised ASX-listed companies. He has been Managing Director of Capital Investment Partners since 2008. Gavin holds a Bachelor of Commerce from the University of Western Australia and a Masters of Business Administration from The Wharton School at the University of Pennsylvania.