Forbidden Technologies (LON:FBT), which owns the cloud based video editing platform FORscene, recently released its 2013 prelims. Proactive Investors (PI) caught up with chief executive Stephen Streater (SS) to discuss the results and see what 2014 has in store.
PI: 2013 has been a significant year for the company. Can you take us through the financial and operational highlights?
SS: On the finance side, the biggest difference between now and a year ago is that we did a big fundraising. Turnover, as expected, was broadly flat, although our operational sales, excluding our one-off sporting event the previous year, have increased about 33%. Even with the increase in sales, we’ve managed to increase our gross profit margin, which is very high; we increased that by 2.7% to 86.4%.
Operationally, we’ve been concentrating on building the business. That has included a lot of extra marketing activity; we have a whole new market branding strategy and trade PR for the first time. We have a new US subsidiary and we’ve appointed a very high-profile head of US operations.
To support the new work we’re expecting to come from the increased market size of the US, we’ve hired additional market R&D staff and sales and marketing staff as well.
Obviously, we’re continuing to move on with our partners and our companies we work with. So, having signed up with Google for the sporting event in 2012, we’re now working with Microsoft, and at the NAB trade show, we’ll be doing a presentation on their stand, talking about our cloud services.
PI: What’s your cash position right now, and how long will that sustain you?
SS: We have £7.8 million in the bank, which is far more than we have had historically. That will sustain us indefinitely.
PI: Last year you launched your US subsidiary. What are the opportunities and how will you tap into them?
SS: The North American market is around ten times the size of our traditional UK market so the key there to have people who can hit the ground running. We've appointed a very high-profile leader of our US subsidiary, who already has worked in that industry for years. The main areas we’re going for are broadcast post-production as in the UK and also sports, either sports clicking or highlights packages for sports, because sports is absolutely huge in the US.
PI: Where will you find additional growth in 2014 beyond the US?
SS: I think we’re looking for a lot of the growth to come from the US. We have a successful service in the UK which grew 40% in post-production, so that’s making the video programmes, and we’re going to hit the ground running in the US with a completely fully functioning product that has had round about 4mln hours of professionally shot content to it already.
We think there will be very fast take-up in the US, so you’ll see that coming through in the second half of this year.
Sport is the other really big area in the US that we’re expecting to grow. Although we will grow elsewhere, we’re expecting the US to be the focus of our growth this year.
PI: You’re also working on an interesting development for the company. It’s a consumer video app. Can you tell us a bit more?
SS: We’ve been experimenting with mobile phones since 2002 when we showed our first streaming of video on a smartphone. With the growth of both iPhone and Android, there are a huge number of smart camera phones out there; there are over a billion mobile cameras in the market today.
But people are really lacking the tools to make use of that video content, to choose the bits they want. Just small things that they can do, like trimming, slow-mo, perhaps adjust the brightness of the shot.
We have all the technology for that; we have currently about 30,000 accounts of our prosumer app, and our plan is to launch, using the freemium model, a consumer version which you can download for free. It will just do the very simple things that consumers need to get their videos enhanced for their audience, and then perhaps the enthusiasts will be able to upgrade.