Market research is often the first stone turned in the development of an advertising campaign. For every dollar of advertising expenditure conducted in Australia, approximately five cents has been invested beforehand into market research. The segment has been traditionally dominated by organisations focused on surveying techniques with end users, whilst in recent years new off the shelf technologies have permitted companies to conduct simpler parts of this process in house.
Consistent with overall an advertising shift toward digital channels, just under a third of global market research is now being conducted online. To date, the shift has been driven by simpler engagement mechanisms. However as traditional research providers seek to close a gap emerging for their more complex services – opportunity could be emerging for the coming listing of Pure Profile.
Pure Profile Ltd is a technology company focused on enterprise software for market research purposes. It specialises in developing and managing interactive customer profiling platforms. Intellectual Property surrounding the software is its principal asset, and is subject to patent protection in Australia, New Zealand, Singapore, Israel, and South Africa. The Company was founded in 2000 and to date has registered over 1million users.
Pure Profile is on course to generate its fourth consecutive period of increasing revenue and gross profit. The Company is transitioning toward a self funding position, with forecast for a modest net profit after tax in FY16. For subsequent growth, Pure Profile aims to expand its service offering downstream to incorporate advertising capabilities. Proceeds from its IPO are therefore scheduled to acquire Sparc, a group of businesses focused on programmatic advertising
Pure Profile’s expansion into marketing represents a yet to be tested operational capability. Combined with the Company’s historic reliance on external capital, new investors should require a speculative appetite. The Company’s significant growing revenue profile and potential to expand its service offering are attractive qualities, however elevated levels of unallocated free float and uncertainties regarding cost control temper the balance of risks.
Company: Pure Profile Ltd
ASX Code: PPL
Shares on Offer: 24.3million
Listing Price: $0.50
Market Capitalisation: $29million
Listing Date: July 29th
Author: Tim Morris
Jul 13, 2015
Having studied Commerce and Science at the University of New South Wales, Tim began his career in an analytical capacity with Wise-owl. Tim has conducted over 500 corporate valuations and appraisals, specialising in pre revenue assets and emerging markets. For the last five years, his Equity Capital Market insights have been featured as part of a weekly column in The Australian and regularly features on Sky News, CNBC, ABC and Bloomberg TV.