9Spokes International Ltd (ASX:9SP) has launched into the 2022 financial year after a fiscal period that targeted key business partnerships.
In a virtual annual general meeting today, non-executive chair Paul Reynolds and CEO Adrian Grant recapped highlights from the 2021 financial year and outlined the company’s strategy moving forward.
Ultimately, 9Spokes’ message was that in “a year like no other”, the company was invested in establishing a strong foundation for future growth.
Moving into the new fiscal year, the technology stock hopes to feed a data-hungry market and scale its business through a suite of key partnerships it established over FY21, with chair Paul Reynolds maintaining the company will “look forward with confidence”.
The year ahead
Essentially, 9Spokes’ proposition involves integrating business apps and data sources in a single platform that puts business data front-and-centre.
Through an open API, these connections provide the data essential to power the 9Spokes platform — cloud-based infrastructure that aims to provide “reliability, scalability and security” for its customers.
Ultimately, 9Spokes wants its solutions to provide businesses and financial institutions with insights based on data, information, and knowledge.
In a recent market update, CEO Adrian Grant said: “Within the next three years, we believe all credit origination and loan management will be assessed, approved and managed with the benefit of historical and predictive data.
“9Spokes has spent five years establishing a data infrastructure — based on data, knowledge and information — on which to build a digital future. What we’ve created can play a vital role in supporting businesses seeking credit and banks providing it.”
In today’s AGM address, chair Paul Reynolds said: “Our market update, issued in May this year, framed the evolution of our product as we took the natural step from data platform to open API platform. It was also an opportunity to mark our position in that space and present our proposition in full to the market.
“As is evident from new and exciting entrants to our market, there is an energy within the business banking space. Open banking and, more recently, open data are creating new opportunities to give businesses the power to leverage their data and drive outcomes. This creates a healthy dynamic for 9Spokes.
“While we’re optimistic, we take nothing for granted. 9Spokes has established a presence globally, through our channel and strategic partners. Our internal team is strong and the technology stack is in place. Yet, we remain vigilant, focused on the core drivers of the business and asserting fiscal discipline.”
Evolving through COVID
Speaking to the company’s progress over the last 18 months, 9Spokes’ executive team admitted global pandemic presented some of the biggest challenges to overcome.
Reynolds said: “Today, we look back on a year like no other. It would be remiss of me not to first acknowledge the contribution made by our employees during this challenging period.
“They have shown true commitment and grit, adapting to and overcoming the strains caused by COVID-19. Further, to our shareholders, and channel and strategic partners, thank you for your continued support.”
“I have no doubt it has been a difficult year for all of us — personally and professionally. However, the challenges we face often necessitate innovation and open new avenues of opportunity.”
Grant echoed Reynold’s comments in a statement: “Entering FY21, there was no doubt it was going to be a year of uncertainty and change – due in large to the impact of COVID-19 on trading.
“Our position was to prepare for the worst and to operate in a fiscally conservative manner, maintaining our current cost structure while working to improve and refine our proposition and operating cadence.”
Financial performance
Because of COVID-19’s impacts, 9Spokes’ leadership team emphasised conservative financial management over the 2021 financial year.
Grant continued: “Our resultant profit and loss for the year was predictable. We sought to maintain our net cash burn at a manageable level, to ensure we met our clients’ expectations and continued to rapidly evolve our platform.
“Regarding expenditure, our focus has been to keep a tight rein on all costs, which were in line with our forecast. One impact of the COVID headwind to our cost structure is the significant cost inflation around retention and recruitment.
“The company raised capital in August 2020 to provide a sufficient cash runaway to support its next stage of development.”
9Spokes’ financial performance over FY21.
Key agreements
A cornerstone of 9Spoke’s growth strategy in the new financial year is a suite of key distribution channel agreements it inked over FY21.
Over the financial year, the ASX-lister established partnerships with payments giant Visa USA Inc and financial insights player Linear Financial Technologies and continued to benefit from its partnership with Microsoft.
Grant said: “We fully accept that the value of these partnerships was not reflected in the operating performance of the company in FY21.”
“However, we continue to build these relationships to directly address and enhance our speed to market. We believe the benefits will be demonstrated this year.”
Non-executive chair Paul Reynolds said the technology stock reached another significant milestone over FY21. In May 2021, it welcomed Virgin Money UK as a channel partner and is poised to deliver a core part of the financial services company’s working capital-health proposition.
Concluding his general meeting address, Grant said: “The aggressive moves in the market give us confidence that with our suite of products — consumed either as a turnkey solution or as individual components — we have the flexibility to rapidly assist our clients to protect and grow their core businesses.
“Finally, we believe we have much to deliver and prove, but equally much to play for.”