Next Investors logo grey

engage:BDR’s margins more than double that of leading influencer marketers’

Published 18-MAR-2019 12:38 P.M.


3 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

Click Here to View Latest Articles

engage:BDR (ASX:EN1) today provided a market update regarding cash deployed from February to early March to activate dormant publishers, which has resulted in significant incremental revenue contribution.

This comes after EN1 announced in late January that it was raising working capital to activate publishers to contribute to revenue in the first quarter and beyond for its programmatic advertising exchange.

EN1 successfully raised A$700,000 in a placement to existing shareholders and shortly after, a draw-down from its existing convertible notes facility of US$720,000.

The capital was to activate partners which were strong contributors to EN1’s programmatic business over the past two years.

The most recently activated publishers have been partnered and integrated with engage:BDR since 2010, when engage:BDR was one of the first in the global digital advertising industry to develop its own programmatic technologies and deploy a self-serve demand-side platform for performance marketers, direct-brands and their agencies.

This first group of publishers to be activated required about A$1.1 million, which was quickly deployed during February and all publishers are now actively producing revenue.

Management decided to deploy this capital early in the year to generate more revenue and it understands the capital will take longer than a quarter to return.

Many publishers required testing periods to validate numbers between the technologies and are currently throttled down as part of this process. EN1 expects to be in full volume capacity with all publishers within the next 30 to 60 days.

In the interim, revenue contribution from these activations is currently about US$20,000 or A$28,000 per day, which just recently started.

Gross profit margins for these activations are in the 30-55% range, averaging ~41% currently. Management will be testing its new Ai technology to reduce margins to increase sell-through and increase margins further to accommodate higher gross profits to find the optimal balance.

At these rates, EN1’s margins are more than double of what the industry’s leading companies yield.

Management expects these publishers to be in their full-capacities over the next 30 to 60 days. Revenue estimates at full-capacity would be around US$30,000 or A$42,000 per day, while gross profit margins are expected to be in the 35-40% range.

Management intends to continue to deploy capital to activate additional dormant and new publishers for the rest of the year. The capital utilised will have several cycles of revenue contribution throughout the year for EN1, yielding strong ROI multiples on the cash.

StartApp Customer Integration Update

Since late 2019, EN1’s engineering team has been working diligently to complete the integration with high revenue opportunity buyer, StartApp.

The original integration (API-based) went live in the test phase in late December, but after two weeks of testing, both companies opted to build a true-programmatically integrated environment together, to accommodate scale.

This development cycle is nearly complete and engage:BDR will be one of the first to integrate with this customer through a fully-programmatic integration.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.