Invigor Group (ASX:IVO) Ltd could be the turnaround story of 2021. The data analytics company looks to have turned around its financial woes ahead of a possible resumption of trade in December. Newly minted CEO Rohan Dhowan spoke with Proactive about the company's financial turnaround, streamlined business and positive outlook for FY22.
In this article:
- The rise of data analytics.
- IVO's eye to resume trading.
- How IVO turned its finances around.
- The future of e-commerce.
- What to expect from IVO in 2022.
The data analytics market has been estimated to reach US$24.63 billion in 2021, up from just US$12.17 billion the year before and projected to grow at a compound annual growth rate (CAGR) of 25% until 2030.
On the S&P/ASX 200, the Information Technology sector – which includes data analytics – enjoyed the highest one-year return rate at 42%. It was the second strongest performing sector with the Information Technology Index up 38.88% in 2021.
According to a report released by the World Economic Forum in 2018, 85% of companies will adopt data analytics and big data by 2022. The COVID-19 pandemic has only accelerated this trend.
Data management is expected to become the largest sub-sector of data analytics in the next few years, as the process of acquiring, storing, validating, protecting and processing raw data into reliable, leverageable information becomes necessary in every business sector.
One company that is taking big strides in assisting companies with their data management is Invigor Group (ASX:IVO) Ltd, a data analytics and insights company that is set to relist having been off the ASX boards since its shares were suspended in October 2019.
This year, IVO has been hard at work restructuring its board and operations while streamlining its data services in a bid to re-list by December 2021.
IVO set to re-commence trading
IVO’s mission is to provide clients with the latest retail data solutions to increase engagement, loyalty, customer acquisition and sales. The company is planning to drive sales and marketing into high gear on its return to the market following a rapid financial restructuring and turnaround.
Invigor utilises a suite of AI-driven competitor price comparison and revenue optimisation tools, designed to read market trends and allow retailers and brands to hit the sweet spot between competitiveness and maintaining margins in their market strategies.
Unfortunately, the market hasn’t always recognised Invigor’s potential in the analytics space and its financial performance was marred by cost blowouts and low revenues, leading to the company being put into trading halt due to “balance sheet issues”.
As Invigor approaches its re-commencement date – expected to be in December – it looks to have turned its performance around.
Restructuring and refocusing
The biggest factor in Invigor’s recovery is the company’s rapid financial restructuring, consolidating debt and product offers while diversifying its target markets and migrating from liquor and electronics to multiple highly prospective verticals.
Invigor has refocused as a company, distilling its product offerings to four highly leverageable services: price insights, a dynamic pricing engine, on-premise insights and retailer insights.
The company has also placed a heavy focus on technological development, impressing existing and prospective clients and allowing Invigor to build its client base while streamlining its product and service offering.
Altogether, these endeavours have resulted in one of the best quarters in the company’s history and Invigor expects to be cash flow positive in FY22.
Year on year growth
More proof of Invigor’s success in restructuring its company is evident in its half-yearly financial report.
Revenue from licence fees and services is up 167% from half-year 2020 to A$900,000 despite difficulties produced by COVID-19 and its accompanying restrictions.
Net loss after tax fell from A$1.79 million in the first half of the year to just A$400,000 by end of June 2021, demonstrating the effectiveness of Invigor’s debt restructuring efforts over the last 24 months.
The company also completed the sale of its German subsidiary, TillerStack GmbH for a net gain of A$1.3 million, a result of its product and services consolidation.
Invigor’s software as a service (SaaS) model has been soundly endorsed by blue-chip client companies like Pernod Ricard and Carlton and United Breweries.
These blue-chip alliances have led Invigor to enjoy a 90% customer retention rate for its client base, with 50% of clients retaining Invigor’s services for over four years.
These recent financial gains were clinched by 50% growth year on year in new customer acquisitions and a 10% revenue increase over the half-year, with user growth up 137% year on year due to Invigor’s investment in its digital platform.
Time ripe for product capitalisation
So why is Invigor doing so much better? The secret, according to Invigor’s CEO, is razor focus and the right personnel.
“I would put our turnaround down to four things; the people, the product, our focus and our timing,” Invigor CEO Rohan Dhowan said in an interview with Proactive.
“With the right people, comes the right focus and my expertise in sales and driving new business, turning companies around off the back of new revenue, that was a big first step.”
A lack of market capital was the root cause of Invigor’s long-standing trading halt, but as far as Dhowan is concerned, Invigor’s cash flow problems were at least partially the result of having a product ahead of its time.
“At that time, we had a pricing insights tool – which is our hero product now – that was trying to play in a market where e-commerce and AI were non-existent,” Dhowan said.
“Similarly, we had an app called Shopping Ninja that was a B to C price comparison tool. That was in a world where affiliate marketing didn't exist so there was no way of monetising that.”
In a post-COVID world burgeoning with new online marketplaces in which brands want direct interaction with their customers, Invigor has already done the legwork of developing and testing its products over its life as a company.
“What Invigor has done over the last 5-6 years is invest in tech,” Dhowan continued, “It's probably why we are where we are today. We've invested close to A$16 million in our tech as of today.
“Thankfully for us, timing is now right for us to capitalise on that. What that investment allowed us to do is bring our tech to a place where it's scalable. It's scalable vertically, and it's scalable by country.”
With its capital issues mostly sorted and tried and tested, scalable tech firmly under its belt, Invigor now looks to define and distinguish itself as it re-emerges into the market space.
'Holy Grail' of pricing and promotion
Dhowan and COO and executive director Thierry Manor brought a wealth of sales and services experience to the company when they joined the board two years ago.
Invigor was able to reduce its key offerings to four products that it says are addressing real, leverageable industry gaps.
“Our value proposition is very clean. We want to be the holy grail of pricing and promotional insights for all brands and retailers, that's what we're aiming toward,” Dhowan said.
“So, any tool, any project or growth strategy that we are talking about, forecasting or wish to get into, it needs to meet that requirement.”
Invigor claims to set itself apart from competitors with a comprehensive suite of data and analyses services, combining market research, online data, and scan data to cover industry sectors including liquor, consumer electronics, and fast-moving consumer goods.
Its business model is simple by design, as defined below:
Exciting new e-commerce trends
Invigor keeps an eye on industries and sectors with high price sensitivity and competitiveness, especially new e-commerce marketplaces like Woolworths and Miracle that have begun to emerge with greater frequency.
The company has noticed some exciting trends arising in the e-commerce space, as brands capitalise on the ability to personally speak to and directly retain customers and their data.
Watch: The future of Ecommerce in 2021: Five trends.
Companies are seeking to consolidate the entire consumer journey, turning stores into fulfilment centres, automating inventory management and streamlining their returns process.
“There's a big focus on direct to consumers and thankfully for Invigor, we allow both the retailers and the brands to make better decisions on their pricing and promotions,” Dhowan explained.
“Where do they want to position their products? We have an AI technology that allows them to optimise their revenue according to different channels. It's a really sophisticated tool that allows brands and retailers to control pricing with an AI engine.”
Invigor’s pricing tool allows customers to set specific rules for their products, selecting individual price differences with multiple competitors to find the ideal balance for competitiveness and customer reach in the market while maintaining company margins.
A sales and marketing-driven future
Revenue from a successful capital raise constituting A$8 million will be used to double down on the company’s recent sales focus. Invigor is looking to rapidly scale up the marketing side of its business and its salesman will no doubt be pounding the pavement to drum up business once COVID restrictions allow.
“We're looking to double down on what we do well: investors can expect a lot more certainty and clarity in who we are and what we're doing and what gap we address,” Dhowan said.
“Any sort of new ventures of growth we plan to go into will absolutely be low risk and high return.”