YPB Group Ltd (ASX:YPB) has set its sights on a positive year ahead on the back of improvement in business in the December quarter which saw the company record a 130 % increase in cash flow.
During the quarter R&D spend went up by 93% - the highest quarterly R&D spend of the year - with a concerted drive to make MotifMicro launch-ready and to complete Connect 2.0 including migrating customers to the new platform.
“Building stronger foundations”
YPB Group CEO John Houston said: “It was pleasing to see cash receipts recover significantly in Q4 2020 as our customers saw some reprieve from COVID-19 impacts.
“While Q4 net cash use did increase somewhat it was primarily driven by R&D investment in our flagship products MotifMicro and Connect 2.0.
“Customer appreciation of the products’ advances has been terrific and is very encouraging for future market acceptance.
“Our commercial progress has been markedly impeded by COVID-19 but there has been substantial progress in building stronger foundations to advance new business in 2021.
“The relevance and commercial appeal of our products are now greater than ever, and we have channel partners keen to promote our solutions, especially MotifMicro1.”
MotifMicro smartphone app
During Q2 and Q3 last year, MotifMicro achieved highly reliable recognition of the novel MM1 forensic authentication particles by both iOS and Android smartphones under ‘real world’ conditions.
In Q4, YPB’s in-house artificial intelligence lab expanded MotifMicro’s capability to a solid portfolio of the most popular iOS and Android smartphones.
The company is now focused on ensuring the MotifMicro app is highly user friendly and essentially foolproof to maximising the practical commercial appeal, and expected to have worked out the kinks by Q1 or early Q2.
Amongst other things, the app will guide a consumer authenticating a product through the scanning and confirmation process using object recognition protocols.
The purpose is to ensure a good user experience and minimise operator error and maximise the rate of successfully completed scans.
The development of the B2C app is well progressed and the company has product mock-ups of commercial samples presently being demonstrated to channel partners and clients.
Connect contact tracing capabilities
The Connect 2.0 Customer Engagement SaaS platform was completed to commercial readiness in Q3.
In Q4, the bulk of Connect clients were migrated from 1.0 to 2.0, and YPB can now host new customers at negligible incremental cost - ensuring a very high-profit contribution from the incremental revenue.
At the same time, Connect 2.0 now only uses hosting resources on demand and is much lower cost compared with an ‘always on’ service.
Connect 2.0 has been well received by YPB’s customers, particularly its self-serve consumer data analytics capabilities.
Connect 2.0 also added contact tracing capabilities as a target market in Q4, and these product track and trace capabilities are generating early commercial interest with existing YPB customers and channel partners.
Commercial partnerships progress
YPB has used the majority of 2020 to strengthen channel partner relationships, particularly in Australia and China, and it advanced business development programs and product innovation ideas during the quarter.
The commercial progress in China continues with the company’s strategy of better account management of existing clients bearing fruit and building the recurring revenue base of YPB China.
Notably, the company added two new channel partners in Thailand who partners provide access to end customers in tobacco, tax stamps and a range of consumer goods.
Driving revenues for 2021
Houston said: “I’m hopeful of a somewhat more normal environment in 2021 allowing us to drive revenues while holding costs largely steady.
“We remain intensely focused on making YPB self-sufficient and monetising the significant latent value in our market-leading technology suite.
“The need for our authentication and engagement solutions has never been greater.”