Pre-Close Trading and Strategy Update
Forbidden Technologies plc (AIM:FBT), the AIM-quoted owner and developer of the market leading cloud video platform, Forscene, today announces its pre-close trading update which includes details of its new commercial strategy to drive sales and support the Group’s growth going forwards.
Since December 2014 Forbidden has instigated a major shift in its sales and marketing strategies with the objective of focusing on wider sales growth opportunities and reducing costs. These strategies seek to capitalise on Forbidden’s significant R&D spend in 2014, its biggest to date, which has transformed both the Forscene video platform and the revenue opportunities available to the Company.
Forscene Video Platform Product Upgrade
Following the fundraising undertaken by the Company in 2013, the Board committed to significantly upgrading its Forscene video platform.
The first upgrade was a major reworking of the editor user interface, designed to appeal to ‘creative’ professionals. While technical advantages have allowed Forscene to be used for editing and high definition publishing in Sports for some years, editors in Broadcast have expected a more aesthetically pleasing interface.
The new editor interface has been well received by our partners in Sports. In Broadcast, we are now also selling Forscene as a professional editing solution, both through our North America staff and in Europe.
The second potentially more significant advance is the newly introduced Media Asset Manager (MAM). This combines five administrative features of the Forscene platform and makes them accessible through a unified web interface: media asset management, account management, ingest, publishing and billing.
By allowing customers to manage their own accounts and those of their own customers, the new MAM allows a major shift in our sales strategy. Previously in Broadcast, we have sold Forscene at a monthly rate, requiring new order forms for each additional user during a production. In Sports we have also charged for usage.
The Company will seek to continually improve the Forscene video platform where appropriate. However it believes that the cost of these ongoing upgrades will be significantly lower than the level of investment required in 2014.
New Commercial Strategy
The Company is adopting a dual commercial strategy focussing on the professional market and the consumer market.
Historically the Company has focussed on securing short term revenue supported by hardware sales. The Board is seeking to change this commercial strategy by offering an ‘all-you-can-eat licensing model’ – flat rate licences to encourage growth in take up – for each client. Existing customers will be able to make Forscene a standard part of their workflows and this will reduce the administrative barriers to using Forscene. Our editor software’s high gross margin underpins this penetration strategy. In adopting this strategy Forbidden is seeking to target larger revenue contracts. The Board believes this strategy will secure a recurring revenue and higher quality revenue model for the Company.
The new licensing model will also allow major companies deficient in advanced cloud video technology to license Forbidden’s. Major companies will be able to incorporate Forscene directly into their own services under their own brands, bringing the technical benefits to their customers.
Major licences will be handled directly by the Forbidden sales team, and will often involve some element of bespoke development. The new wider markets will be addressed through modern digital marketing and sales techniques. The majority of clients therefore will be sold off-the-shelf products, bought through websites or digital stores.
Forbidden is pursuing a goal of broadening the use of its technology through the creation and integration of a cloud social media platform. This integrates with the Forscene cloud video platform to create a base from which to launch both eva, its video social network currently in development, and its next product, “Brand Y”, which fills the gap between eva and Forscene.
New Executive team
The strategy of Forbidden, as set out above, is being implemented by a new Executive team. Led by CEO, Stephen Streater, who also provides technical input, Finance Director Phil Madden provides financial input. Jason Cowan, with his wealth of experience in Broadcast, is our newly appointed Director of Business Development, where his focus on growing Sports is already showing promise. Aziz Musa, Director of Marketing, has rolled out his new professional marketing strategy over the last three months. This is already showing a marked increase in brand awareness and lead generation.
The wider use of the Forscene platform, for both professionals and consumers, is at the core of Forbidden’s growth and revenue strategy. Following the major upgrades undertaken last year, the ongoing work in Forscene is now continuing at a more normal level. Together with the restructuring of the Company’s North American subsidiary, this will lead to a significant reduction in the Company’s losses in 2015 and beyond. With year-end cash of GBP4.36 million, the Company is well placed to execute its commercial strategy as set out above.
Stephen Streater, CEO of Forbidden Technologies, commented:
“We made major advances in the platform last year, and the new strategy plays to Forbidden’s strengths. Forbidden specialises in high performance products and services designed for scale. The changes we have made across the Company are to enable us to capitalise better on the growing movement into the cloud video space, both in professional and consumer markets.”
Forbidden Technologies plc
Stephen Streater, CEO
Tel: +44 (0)20 8879 7245
Cenkos Securities plc (Nominated Adviser and Broker)
Bobbie Hilliam, Corporate Finance
Tel: +44 (0)20 7397 8900
Redleaf Polhill (Financial PR)
Tel: +44 (0)20 7382 4730