Plexure CEO Craig Herbison talks to the Herald about their latest hiring spree. Video / Dean Purcell
Plexure
At a time when many bosses say they just can't assess the impact of coronavirus on their business, Plexure chief executive Craig Herbison lays it on the table - telling the Herald his company's mobile marketing business is "Covid 19 recession-proof"
The company broke into the black for its financial year to March 31, 2020, reporting a $1.01m profit from last year's $703,000 loss as revenue jumped 51 per cent to $25.5m customers.
And cash doubled to $14.22m - in large part thanks to McDonalds buying a 10 per cent stake in April last year.
Did Plexure take any hit from the pandemic during the first quarter?'
"We haven't really had a big impact. The thing about being a platform-as-a-service or software-as-a-service business is that our relationships are license-based. We have some transaction revenues and some transaction revenue has come off a little bit but not significantly," Herbison says.
While many companies have offered no guidance in the face of Covid-19, Herbison says Plexure will be making a 2021 forecast within the next few weeks.
The Plexure chief executive says mobile is "something companies thought about in the past; it was on the agenda. Now it's the thing they really need to double-down on." With lockdowns, "That behaviour change is going to be more cemented in people's lives because they 've had to use it
"And that's what we're hearing from a lot of our customers. They're not investing in in-store environments, they're not investing in kiosks, they need to invest in the mobile channel, which is good for us. So I'd like to think that Plexure is fairly Covid-19 recession-proof at this point."
Shares were up 7.5 per cent to $1.00 in early trading after the full-year result was announced.
Plexure chief executive Craig Herbison. Photo / Dean Purcell
Herbison's Covid 19 recession-proof theory notwithstanding, Plexure was caught in the initial coronavirus tumble, halving to a 52-year low of 42c - but have climbed steadily since (the stock hit an all-time high of $1.12 in July last year on the back of the McDonalds investment).
The Plexure boss says a system that Plexure built for 2700 McDonalds outlets in Japan, which sees an order start to be made as a customer hits "geo-fence" has come into its own during the current, drive-through only era.
"All the customers we serve are seeing a huge increase in traction on mobile devices because that's where customers are actually able to be at the moment," Herbision says.
McDonald's has become Plexure's biggest customer, and a major investor. Photo / 123rf
"So they're wanting to go harder and faster, particularly around personalisation, to build their propositions for when things settle down again and people do get back into the physical store environment."
While it continues to be heavily-focussed on McDonalds, Plexure added 13 new customers and markets last year, Herbison says. A signature new signing in February was Super Indo – one of Indonesia's leading supermarket chains (51% owned by European multi-national grocery organisation, Ahold Delhaize.
The addition of a major new retail customer will help diversify revenue beyond the Golden Arches; the global McDonalds deal provides the bulk of Plexure's revenue but the fast-food giant's 10 per cent stake and $5m cash injection came with a restraint-of-trade fish hook that stops Plexure working with Macca's direct rivals (the White Castle deal was closed just before the investment).
"We've got good strong cash reserves for the next phase. Having a good, strong commercial business is very good in these times," Herbison says.
Staff numbers increased from 69 to 139 over the year. Most are still in Auckland - including Herbison and around 80 developers, but a sales team - including a new head of sales - was recently established in New York; just in time, it turns out, given frequent-flyer Herbison had formerly lead the North American sales effort himself.
The Plexure boss maintains his company won't be hurt by the travel bans.
"We're predominantly Auckland-based, using phone calls and Zoom. We don't have staff in every market we're in anyway. The business hasn't really missed a beat."
