Kyckr (ASX:KYK) talks customer growth and tailwinds


by Jessica Amir

Kyckr Limited (ASX:KYK) Managing Director, David Cassidy, discusses momentum in the business following key client wins with Fortune 500 companies, strategy and outlook.

Jessica Amir:
Hi I’m Jessica Amir for the Finance News Network. Joining me from Kyckr Limited (ASX:KYK) is Managing Director, David Cassidy. Hi David and welcome back.

David Cassidy: Thank you Jessica.

Jessica Amir: David just remind us about Kyckr and what you do in the world that’s so special, in the world of compliance and Know Your Customer?

David Cassidy: The last six to 12 months in Australia, has shown the importance of trying to protect your businesses against money laundering. And the regulation itself, how important it is for sectors and banking, financial planners and even the real estate industry.

So what we do importantly in this world is, we apply technology to bring about efficiencies where previously people have been used, to perform these tasks. That’s important because the regulation is so complicated now, you need technology and you need the efficiencies from it, number one.

And number two, is we supply information from over 180 sources around the world, which is the best source of information. It’s called primary source information, it’s got the best legal veracity to it. And that’s why it’s important to sectors, in particular banking sectors.

Jessica Amir: Where’s the business at in terms of development?

David Cassidy: 2015 was really the inflection point for our business, because the regulation got to a tipping point where automation became necessary. And we really got our first automation client then, which is Bank of Ireland. So since then, realising more validation, more clients coming on board, has been important. We’re well past the validation stage now.

We’ve had Bank of Ireland running for a while, operationally we’veset up the capabilities to deliver that. We’re now past that to a stage where we’re bringing on board, global blue chip clients. So now it’s all about revenue and it’s about global revenue, and that’s what you’ll see in our business ongoing.

Jessica Amir: Do you mind if we just pause on financials for a second. Can you tell us about your recent financial results and perhaps even the last two quarters?

David Cassidy: FY17 to 16, we continued to show year-on-year growth. In that period we increased by 34 per cent and we’re a business that can continue to do that. But we’re at a stage now in having global blue chip clients, where we need to start to develop a runway of quarter-on-quarter growth. Q1 is typically a flat period for us, as it was this year from Q4. And that’s because our concentration of revenue from Europe in particular, where everyone is on holidays, brings about that outcome.

But ongoing because of global blue chip clients, we’re sure that we’ll get to a runway of quarter-on-quarter growth. So that’s what we would expect ongoing.

Jessica Amir: You’ve recently done a capital raise. How much did you raise David and how will the funds be used?

David Cassidy: We raised $2 million, which was oversubscribed, we actually really were only looking for $1.5 million, we took a little bit more in. And that was important to us for a couple of reasons. Number one is we’ve taken on board a couple of very, very high quality funds to support our stock and we’re very happy to see them come on board, number one.

Number two, is again, because of our global clients in particular the likes of Bloomberg, the operational demands they put on us as far as 24/7 support all around the world, means that we’ve had to beef up our capabilities around the world. They are also a client who sells to their clients, so our biz staff people need to work with them and their selling.

So we’re now opening up offices in London, we’re a lot more time in New York and opening up an office there. And that’s the predominant use of these funds, to give us the runway and the support and the step change in the plan, which came earlier than what we would have expected, to have these global blue chip clients on board and developing revenues sooner.

Jessica Amir: Last question now David. Can you walk us through the key milestones for Kyckr investors over the coming quarters?

David Cassidy: Now that we’ve got global blue chip clients on board, the likes of Citigroup, IBM (NYSE:IBM), Bloomberg and Elavon, who are a global payments provider, we’ve really got to start to show revenue coming from these global blue chip clients. And that’s really the step change that we’ll see in our revenue, across the next couple of quarters.

I mean this quarter we still plan to see Bloomberg revenue starting. Moving into Q3, we expect to see other revenues contributing to our total revenue.

So the key milestones for us are revenue coming in from our global blue chip clients, number one. Number two is as a result of that, a tipping point in our cash burn going down, which we hope to see Q4-Q1 at the outside. And somewhere within FY19, getting a monthly run rate of profitability in our business. And they’re the key milestones across the next year and a half that we’re planning for.

Jessica Amir: David Cassidy, congratulations on bringing such outstanding clients to your business, we can’t wait to see what happens over the next couple of quarters. So good luck and take care, I’m sure we’ll see you soon.

David Cassidy: Thank you Jessica.


Jessica Amir

Finance News Network
Jessica joined FNN in January 2017 after having worked in financial advising for seven years and in TV journalism for seven years, specialising in finance, equities and analysis. She has interviewed former Prime Ministers of Australia, Tony Abbott, Julia Gillard and Kevin Rudd and ex Treasurer Jo Hockey. Jessica has worked as a journalist with Sky News Business, ABC 1, ABC's The Business, ABC24 and has also been a regional Channel 7 and 9 TV reporter with Prime7 and Win News.