Invigor’s losses deepen to $6.77M

Invigor’s losses deepen to $6.77M

Records a net loss after tax of more than $6 million, from about $3 million in 2015

Data analytics company, Invigor Group (ASX:IVO), has reported a net loss after tax of $6.77 million for the year ending 31 December 2016. The company’s loss doubled from 31 December 2015, of $3.11 million.

However, its revenue was up from $5.85 million in December 2015 to $8.5 million in December 2016.

In a statement on the ASX, the company said the result for 2016 reflect the full-year contribution of its acquisition of Condat AG, an impairment charge of $1.5 million, a write down of an intellectual license of $320,000, and its continued investment into product development.

Invigor acquired Condat AG in October for $4.5 million, intending its software to “strongly complement” Invigor’s existing product offering, and help its development towards becoming an end‐to‐end big data and content distribution provider.

“Condat continues to win additional business from new and existing customers,” Invigor said, in the statement.

On 28 February, ARN reported that Invigor Group recorded $8.5 million in revenue for the first half of the financial year, up 58 per cent from the prior corresponding period, attributing its "strong growth" to the Condat business.

Under Invigor’s ownership, Condat booked revenue of $7 million and earnings before interest, tax, depreciation and amortisation (EBITDA) of $743,000. Its gross margin was up 18 per cent, at $1.3 million.

At the time of the acquisition, Invigor executive chairman, Gary Cohen, said Condat would "strongly complement Invigor’s existing product offering".

“We have identified Condat as a business which will seamlessly slide into our vision of taking Invigor’s existing product offering and moving toward becoming an end‐to‐end solution for our clients who want to source, aggregate and analyse data and publish relevant content as a result,” Cohen said at the time.

On the consolidated statement, the company identified an increase in employee benefit expenses, professional fees, an impairment of other financial assets, other operating costs, a loss from joint venture and a loss on non-current assets from the previous corresponding period.

Invigor entered into a joint venture arrangement, named MI Ventures, with Melic in September 2016 to install Wi-Fi at Manly Wharf. The joint venture was formed by way of a unit trust, with each party holding 50 units each.

Invigor said the joint venture will earn revenue through the provision of “targeted advertising, promotions, and offers to commuters at Manly Wharf, through the Wi-Fi network that has been installed”.

The company also identified the balance My Verified ID Holdings (MVID) owed to Invigor. This amounted to $1.77 million. The company also invested in the development of its marketing platforms, Social Loot and TUXXE.

Invigor executive chairman, Gary Cohen
Invigor executive chairman, Gary Cohen

It has cash reserves of $642,000 at 31 December 2016, with a capital raising of $1.6 million in April 2016 by way of a share purchase plan offered to eligible shareholders and a share placement. On 21 July 2016, the company also completed a capital raiding in the amount of $1 million from the issue of 34 million ordinary shares at $0.03 per share by way of a share placement.

An additional funding of $2.52 million was raised from investors and $2 million in loan from Partners for Growth (PFG) in February.

Invigor said it has settled the remaining funds of $80,000 owed to Condat vendors as of February this year and has received an extension of the $1 million Marcel loan facility from 31 March to 31 March next year.

Going forward, the company said it is looking to leverage both existing and new partnerships to drive further growth across all business units and expects a “number of key partnerships” to “significantly strengthen” the distribution channels for both Insights Visitor and SpotLite.

On 16 September 2016, ARN reported that Invigor Group grabbed a number of contract wins thanks to a spate of successful tenders from its Insights Visitor division. The contracts include a three-year agreement to supply Preston Market in Melbourne’s north, providing its Wi-Fi analytics solution to the 140 retailers and the surrounding redevelopment once completed.

On 2 February 2016, Invigor inked an agreement to sell its services business to Sydney-based technology services company, Asmex Digital.

It also expects its Insights Retail revenue to grow materially through the engagement with retailer and brand groups. “The company is also assessing the entry into new market verticals and geographies to further drive growth of Insights Retail,” it added.

In addition, it expects implementation of its business strategy to deliver improved financial results and intends to seek investment opportunities which are “profitable and synergistic” with its overall strategy.

At the time of writing, Invigor’s shares were trading at $0.02.

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