Aspermont Limited (ASX: ASP) (‘Aspermont' or the ‘Company'), the leading media services provider to the global resources industry, is pleased to present the link to its new Investor ‘Frequently Asked Questions' (FAQs) section on the corporate website.
We are pleased to detail in full, answers to typically asked questions by those we have met in the investment community. Please go to this link http://www.aspermont.com/investors/investor-faqs or find the transcript of all these answered questions attached to this announcement.
For further information, please contact:
|Alex Kent, Managing Director||+44 207 216 6060|
|David Straface, Company Secretary||+61 8 6263 9100|
|Pegasus Corporate Advisory|
|Michael Brown||+61 400 248 080|
Aspermont is the leading media services provider in the mining and resources industry and delivers high value, premium subscription-based content through digital, print, conferencing and events channels. Aspermont's portfolio includes brands such as Mining Journal, Mining Magazine, Australia's Mining Monthly, EnergyNewsBulletin.net, Farming Ahead and MiningNews.net. Following a restructuring of the business and transition from print to digital media, Aspermont's strategy is focused on scaling its solution and penetrating new territories and sectors.
Aspermont is listed on the Australian Stock Exchange (ASX: ASP) with offices in London, Perth, Sydney, Denver and Belo Horizonte.
For more information please see: www.aspermont.com
Aspermont began in the early 1990's as a small, Perth based, print publisher and through acquisitions and organic growth has evolved to become the dominant B2B media company for the global resources sector.
Aspermont invested heavily over the last 20 years in both technological IP and infrastructure to implement a solution, for the B2B digital media market, that is scalable for any region or any sector worldwide.
Aspermont is now a London based company supported by offices in Perth, Sydney, and Belo Horizonte and with contributors from across the world.
All our brands can be found on our website www.aspermont.com/brands
Currently Aspermont has market leading media products and brands in:
Each of these sectors has both the size and long-term macroeconomic characteristics that align with the company's growth and risk diversification strategies.
There is also a high level of cross over for suppliers in each of these sectors enabling Aspermont to leverage its relationships and cross sell more effectively.
We have a global network of over 75 journalists, industry experts and opinion formers contributing content to bring the best out of our editorial team.
Aspermont has 3 key growth strategies:
Aspermont has an organic growth model in which it commercialises high value content through subscriptions based audiences. That core paid audience is cross monetised through a series of other revenue branches, such as advertising and events.
Our core growth model, technological agility and centralised (variable) cost infrastructure enables us to scale solutions for other discrete sectors and geographies. Over the next few years we will focus on scaling new geographies in our current sectors.
At Aspermont we are confident in our ability to scale into new markets without the need for acquisition although we recognise the value that truly iconic brands, such as our own 185 year old Mining Journal brand, can bring for accelerating market share. Therefore Aspermont is prepared to acquire titles if the brand heritage and value accretion opportunities are in line.
Over the last 15 years there have been significant structural shifts in the global media industry where publishers have had to contend with volume declines in print advertising and a general shift in marketing spend away from ‘brand and display', through ‘programmatic advertising' and onto more bespoke content marketing solutions.
In the midst of that transition, much of the ‘old' media has been left behind in its customer value propositions.
Pressured by declining revenues and profitability, behind the curve on technological investment in core platforms, inexperience in the right commercial models to adopt (particularly around paywall strategy); many have been caught in the headlights. In lots of cases this had led to the ultimately fatal pursuit of retrenching highest quality talent, reducing cost by sacrificing product quality and failing to invest sufficiently in skills required to compete in the modern era.
On the other side of the landscape the new media entrants have powered high volume, low cost and invariably low quality content products. With commercialization coming primarily through programmatic advertising networks, their relationship - between publisher and client - has been broken. Such a position leaves the publisher without control over critical revenue drivers such as premium pricing, up and cross selling. Similarly those who rely on highly optimized content for search engines also suffer wild volatility with google algorithm changes making forward revenue visibility a difficult science.
Aspermont is well placed from both the pitfalls of old and new B2B media because it endeavours towards a hybrid of the two models. Grounded in the commercial principles of high quality content and premium rate audiences; the company has invested heavily in technology and systems to enable high digital circulation growth with a scalable cost base.
In terms of Print; most of our subscribers now pay a premium to include it in their subscription packages; underlining the longevity it still has as a medium.
Such a commercial repositioning of this service has also enabled us to invest in product quality and distribution as opposed to downgrading like many of our competitors have. Print is one part of a cross-platform offering that we deliver to our clients; nothing more; nothing less.
Mining, Agriculture and Energy are our three sectors. We have global leadership in mining and regional leadership in the other two. In time we will launch B2B technology as our 4th sector. Becoming the leading global media provider for all our sectors remains the primary goal.
To launch a new service in a new geography, for one of our existing sectors, costs us less than $50K and takes less than 9 months to commercialise.
At that point we are able to build the additional product suite for cementing market share and developing increasingly higher margins returns from the new audience base.
Over the last couple of years we have grown gross profit margins from 3% to 16%. We expect to continue that growth trend over the next few years as our subscriptions and events revenues, in particular, build.
Our medium term target is 20% and beyond that, scalability of our model should see much higher returns.
Distraction risk is our number one challenge. We have a highly innovative business and we compete in an industry with an exceptionally diverse range of alternative products and business model, options that we could pursue. It is therefore our job to focus on our stated goals whilst remaining adaptable if conditions require.
We can fund our existing plans and anticipate our new businesses to generate sufficient free cash flow for developing higher margin returns.
Right now investors should look closely at our SaaS (Software as a Service) metrics released quarterly to the ASX. These metrics monitor the growth of subscriptions; our core business solution.
We consider the lifetime value (LTV) of subscriptions as the single most important metric for now. Investors might look at that figure, its current growth rate and then compare to the prevailing market capitalisation of Aspermont as a whole. It's a useful baseline barometer of under/over value of our shares.
We would then suggest investors add further value further from our revenue streams in advertising, events, research and data to see the overall picture.
In due course we will add more key metrics to our quarterly report so investors can analyse the lifetime value and growth of these other revenue streams as well.
The current year to September 2018 is all about top line growth. Revenues of prior years had suffered, particularly in the events business which we sold for $11M late last year. We invested heavily in OPEX to launch our new businesses this year and expect FY18 earnings to remain flat as a result.
We see significant scope for profitable growth in the next fiscal year and expect powerful and annually consistent growth in earnings going forward from then.
Over the last two years we have done a complete overhaul of the Aspermont business model and have sold off the underperforming businesses - as described in both in ASX announcements and financial filings. The financial turnaround is also well described in our market statements but less externally visible, perhaps, have been the significant upgrades we have made with respect to our operational structure, talent, skills and overall competitiveness.
Historically, the Aspermont Group operated in a number of decentralized regional units each with different skills sets, with many being the result of acquisition. Over the last two years we have moved our core business to London where our key management has clear oversight of the reporting lines across the group.
Significant efficiencies have been realised through outsourcing; with most back office functions being offshore and with growth scalability being enabled through new technology, systems, and processes.
Our most important asset, our people, is the key component of our long term development strategy. At a time when most of our competitors have been shedding frontline talent, Aspermont has recruited high-calibre digital media personnel across our markets and will continue to so.
There are a very large number of people, all over the world, involved in the mining industry and its supply chain. Currently our mining publications have over 30,000 paid readers. Whilst we do not expect everyone in the mining industry to be an Aspermont subscriber we do see a large opportunity for further development in the sector. Factoring global Energy and Agriculture on top of that gives us a sustainable runway for many years of growth in our existing sectors.
With both our new platforms and marketing capabilities in place - and advancing all the time - our customer acquisitions processes are optimising. The paywall solution that Aspermont has been building over the last 17 years guides new users through free registrations, paid trial signs up and onto full paying subscriptions.
More behavioural data and analysis capabilities are enabling us to serve the right content, to the right people, at the right time. In doing so subscriber engagement patterns are rising (as can be seen by lifts in our loyalty index that we report to the ASX on a quarterly basis along with our other SaaS metrics) and renewal rates are going up.
Rising renewal rates and increased new business volumes taken in combination are the reason for our top line subscriptions growth.
ARPU is the average price paid for a subscription.
Each subscription has varying numbers of members attached to it. Better analysis of those subscribers' usage patterns and more effective on-boarding and content engagement processes are translating into large pricing uplifts from simply building more and more paid members per subscription.
Content value is also critical to ARPU. The more value we deliver to our subscribers the more they are willing to pay for our service. This year we have launched both a new research business and a data business. As we build new products in these new formats we initially provide this new content free to existing subscribers which drives large value increases in their existing content proposition. We find that on renewal, most will pay to add these services to their subscription package which supports future price increases and also drives ARPU growth.
Our commitment to build more content value per subscription of itself increases ARPU.
Delivering value first and lifting price secondarily allows us to take the customers with us. Delivering content assets to them at far cheaper prices than they pay for other services actually reduces their total costs even though we are lifting our own prices. There is a high degree of disruption we are looking to bring to a number of adjacent content markets that service our clients and specifically in data and research.
In time we will look to provide price-tiered offerings to subscribers and thereby ensure we don't lose out on new subscribers from having an entry point set too high. Particularly unique and high quality content may get broken off into a premium service leaving the primary daily news service as an entry level item. This is something Aspermont has historically done before to great effect.
Better content, better processes and better distribution channels are the drivers.
Our ability to analyse user behaviour with respect to content consumption helps us focus on developing products in sub-sectors where we see the highest demand from our readership.
Through delivery of the right content, to the right people, at the right time, we improve our customer engagement (and loyalty index) and interact/renew the client at the right time in their buying cycle.
At Mining Journal, our flagship product, we lifted our renewal rates from 66% to 80% over the last 3 years. As subscriber/member depth increases so renewal rates will continue to trend higher.
We expect to achieve 85% overall renewal rates in the not too distant future.
Subscriptions are the key, as is the quality of content we provide. Our higher monetisation points typically come from other media formats such as advertising and events businesses.
Much like print; face-to-face may well be an old medium but it isn't one that's going to go away. One could argue that in an otherwise digital era, the importance of face-to-face for networking and relationship building have never been more important.
On the reverse, it is through analysis of our content consumption patterns on the digital publications that gives insight into the topics that we should look to cover in our conferences. So it's a virtuous circle.
Aspermont's main focus comes by utilising its digital publishing assets to drive high value experiences to its face to face format and vice versa. Any topic that might bring a delegate to a conference is usually something of ongoing interest and this is where our daily publishing services complete the pre and post conference demand.
Events are another platform which extends the delivery of content, our core product. Subscribers consume content at different times and on different mediums. Providing an end-to-end offering for our audiences ensures Aspermont's brands are the principal and constant point of contact our users have with their industry; 365 days per year.
Both teams work symbiotically with each other. [As do the sales teams for that matter]
Whilst content is the primary raw material that our marketing systems use to drive traffic, paid trials and ultimately new subscriptions it is the continual analysis of the effectiveness of content that re-guides the focus for the future production of it.
Old media Publishers previously produced the content they believed was right for their audiences and what they thought audiences should want to know. New digital media operators often produce content that they know they can market most effectively to drive traffic to their websites.
Aspermont blends the two. We produce the right balance and mix of content we believe the audiences require and then continually test and measure that proposition to see if we have it right. In some instances we stop production in one area and build more focus in the other. More often than not, when we identify new content trends we just build additional content resource to deliver it as an addition to the existing offering.
Better analysis of our users and their content consumption patterns improves the marketing systems and strategies that we have to drive the overall result. Building this user analysis capability was the cornerstone of our recent Project Horizon (PH) technology roadmap. The success of that platform development is playing out as we deliver across the board growth in key SaaS metrics.
Currently our new focus is on better lead nurturing and lead scoring systems. With so many thousands of leads, the challenge is accurately identifying the best leads and the right time for the sales teams and other marketing conversion processes to engage and improve their conversion rates.
As our lead intelligence builds further so our customer acquisition costs will fall.
In our current sectors we see little evidence that any of our competitors have reached the same level of effective technological application that we have. Aspermont has a few mining media competitors left which it will actively challenge over the next few years. Beyond that, the new products and services we are building (specifically in events, data and research) we see as having high potential to be disruptive to other adjacent competitors.
But the media market and the technology sectors are extremely fast moving. Print to digital was an insurmountable disruption for most publishers but took 300 years to come about, the next major disruption will take far less time to arrive but with our technologically forward leaning model and organisational skills base we expect Aspermont to be at the front of that curve - as it always has been.
The marketing spends for all the mining companies and service or equipment providers runs in the $Billions and Aspermont is the dominant media provider for that global industry. We see an extremely large opportunity for high growth in mining media alone.
Growth however will not just be delivered through traditional means. Beyond the subscriptions model which will take on a life of its own, our sponsorship solutions will increasingly become bespoke which is where we will be able to access much larger account spending. As was the case with US tech companies in the early 2000's; shifting towards a more ‘consultative partner' approach than simply a ‘billboard operator' will see a re-evaluation of the relationship and value we have with our clients.
We envisage a bright and exciting future for Aspermont.
With the tech credentials of our senior management team and their ability to commercialise new advances quickly we see an expanded opportunity, beyond mainstream B2B media, for an application of those skill sets.
Before we run, we must first walk and over the next few years we have clear growth strategies to drive profitability and shareholder value. That will be our only focus.
We look forward to keeping you in touch as we progress.