Pureprofile sold ANZ performance business to Unity4 – crashed by 43.4% on ASX

Pureprofile Ltd (ASX: PPL) was established in 2000 and based in Sydney, Australia. The company provides profile marketing and insights technology services through three primary divisions to researchers, businesses and marketers. It has operations in the home country as well as in various countries abroad.

On February 12th, 2019, the company announced the finalisation of the sale of its Australia and New Zealand (ANZ) Performance business to Unity4 Holdings Pty Ltd (Unity4). The deal is expected to be locked officially on March 1st, 2019, subject to completion of requisites like sufficient net working capital. 

The agreement prescribes transfer of 100% shares in Cohort Holdings Australia Pty Ltd and a selling price of $ 500,000 to be paid through cash in two instalments, i.e., $ 250,000 after completion and $ 250,000 by July 31st, 2019. Cohort Holdings was acquired in 2016 and only concerns the operations in Australian and New Zealand, excluding the performance business in the United Kingdom.

 The transaction follows the Board’s assessment of the ANZ Performance business which continued to report falling revenues, failing to cope up with challenging market conditions in Australia. Meanwhile, the royal commission into banking precipitated the insurance clients terminating all lead-generation projects. At the backdrop of high cost and inefficient operating model, the decision was undertaken to stabilise the business.

Unity4 is world-renowned virtual contact centres with home-based contact centre agents’ operations across the UK, New Zealand and Australia. Thus, it is already serving some of the existing clients of the Cohort business and can potentially generate and explore synergies by incorporating the Cohort business to complement its strategies.

Before this, the company reported its H1 FY2019 Unaudited Financial Results ahead of the half-year results scheduled to be released towards the end of February 2019.

As per the brief update, the Data & Insights division, engaged in market research and provision of research technology platforms, recorded revenue of $ 9.5 million in, up 20% from $ 7.9 million in the previous half year H2 FY2018. Similarly, Media division, that purchases and sells advertising inventory through online portals for publishers and advertisers, had revenues rising from $7.3 million in H2 FY2018 to $ 8.4 million in H1 FY2019, reflecting 15% growth.

On the contrary, the Performance division had declining revenues at $ 5.9 million in H1 FY2019 from $ 8.5 million in H2 FY2018, indicating 30% downtrend. The division generates leads for the clients via its consumer database, proprietary and partner digital assets. It also assesses consumer profiles deeply and offers support to the companies to better segment, target and engage with the audience more effectively.

Overall, the Gross profit reduced by 7% and stood at $ 10.8 million from $ 11.7 million in the previous corresponding period. Also, there was a 3% point decrease in the Gross margin to 46% from 49% resulting from the mix of lower margin revenues generated by the media trading business. Looking forward, the company is focused on growth in the UK market and mitigating the impact of weaker-performing business units.

With the close of trading on the ASX, the PPL stock was trading at a market price of AUD 0.030, down by 43.4%, indicating an intra-day loss of AUD 0.023. Around 7.02 million volume of shares were traded. The stock is holding a market capitalisation of AUD 6.23 million.


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