Dev Clever Holdings (DEV ) FY20 results to 31 October 2020 reflect a period where the forward order book quadrupled to £2.4m, recognised revenue more than doubled to £1.25m and post period end, the strongest balance sheet in the Company’s history.
Financial highlights
The value of orders and customer commitments received during FY 2020 totalled £2.4 million (2019: £0.5 million), in with expectations.
Total recognised revenue increased 161% to £1.25m (FY19: £0.5m), reflecting the establishment of sales channels for the Group's core Educate platforms Launchyourcareer.com and VICTAR VR and an uplift within Agency Services supported by the acquisition of Pheonix Digital.
However, additional investment in the ‘productisation’ of its software platforms, the strengthening of its executive and senior management teams, and the establishing of a dedicated marketing function resulted in overall EBITDA loss of £0.9 million (2019: £1.0 million).
Adjusted loss per share was therefore 0.19p (FY19: 0.23p).
Cash, as at 31 December 2020 was of £1.03 million (2019: £0.50 million), with £12.0m (circa £11.3m net) raised post-period end to accelerate productisation and commercial development of both Launchyourcareer.com and VICTAR VR. A further £6m (gross) expected to be completed imminently.
Operational Highlights
Operation highlights for the 12 month period included several strategic agreements, partnerships and an acquisition.
Strategic Agreements and Partnerships
The most significant strategic agreement for DEV is obviously its exclusive three-year global distribution agreement with Lenovo, the global technology hardware company, officially announced in April 2020. The agreement provides DEV with a direct route to the global EdTech markets for its proprietary careers education platforms, Launchyourcareer.com and VICTAR VR.
In July 2020, DEV announced it had entered into a partnership agreement with Veative Labs Pte. Ltd ("Veative"), a leading provider of online and immersive learning to the education sector. The partnership delivers integration and cross-selling opportunities for both sets of products and services to provide a complete careers development and learning programme, in and out of the classroom, on a global basis. In September 2020, the firm worked with Lenovo and Veative to conduct COVID-19 Impact Assessments in the US and India worth US$1.2m.
In September 2020, DEV also entered into a three-year commercial partnership with Low6 LTD, a leading provider of mobile pool betting applications, to enable Low6's mobile quiz-based pool betting application, PubWars, to be integrated with the Engage platform and PubPal, the Company's mobile and contactless ordering and payment service.
Acquisition
DEV completed the acquisition of Pheonix Digital Limited, a multi-service digital agency within the education sector, during the period. The acquisition both enhanced the Company's sales and marketing capabilities whilst strengthening the Agency Services offering.
Towards the end of the period, the Group also entered into a three-year commercial agreement with Heineken for the deployment of the Engage consumer loyalty platform, to run digital campaigns across its Star Pubs estate.
FY21 Outlook
In the near term, Dev expects to launch in India through a “highly innovative five-year exclusive partnership agreement” with Veative Labs and the National Independent Schools Alliance ("NISA"), India's largest governing body for budget private educational institutions.
The partnership enables both a business-to-business subscription model for NISA affiliated schools and a direct-to-consumer subscription for pupils.
In 2H21, DEV also expects to announce a material license agreement (currently subject to a non-disclosure agreement) that utilises its core EdTech services capabilities. Whilst the details of this comprehensive partnership agreement are currently subject to an NDA, further details should be forthcoming once the innovative proposition goes live for general availability, which is expected to be in the second half of the 2021 calendar year.
Investors will see that Dev’s work with Lenovo has provided it with a direct route to the global EdTech market for its careers education products, Launchyourcareer.com and VICTAR VR with recognised revenue in 1Q21 alone coming in broadly the same as for the entire FY20.
Booked revenue was also substantially ahead of expectations leading to increasing confidence that the Company will announce further revenue acceleration during 1H21 and further details of the as yet unnamed “material agreement” signed post period end.
Shares in DEV have continued to soar over the past three months to open at 37.75p this morning with a strong balance sheet providing strong foundations for further share price appreciation this year.
Reasons to Follow DEV
Dev Clever Holdings is a software and technology group based in Tamworth, United Kingdom, specialising in the use of cloud-based VR and gamification technologies to deliver rich customer engagement experiences across both the education and commercial sectors.
Its educational division offers careers guidance and recruitment solutions to secondary schools, colleges, universities, apprenticeship providers and employers with digital products to recruit and develop applicants and skills within their institutions and organisations.
Through its VR Careers Experience, VICTAR, the group encourages ‘hard to reach students disengaged from the process as well as reaffirming students on their career journey.’
Focused on bridging this global skills gap, DEV offers technology designed to support schools globally and to embrace immersive technology and revolutionise career guidance programs.
Due to a new reality of distance learning in the age of the COVID-19 pandemic, the EdTech space has surged with analysts previously reporting an average increase in revenue of 335% according to an industry impact analysis by Rootstrap.
According to market data published by MarketsandMarkets, the EdTech and Smart Classroom Market size is expected to grow globally from $85.8 billion in 2020 to $181.3 billion by 2025.
In May this year DEV entered into an agreement with Intrinsic Capital Jersey Ltd, founded by serial entrepreneur and investor Chris Akers, to raise up to £10m (gross) through a subscription at 10p.
The fund raised in May enabled DEV to accelerate its growth plans with collaboration partners and clients whilst also funding the expansion of the Company into new territories.
The valuation multiples for EdTech Companies continues to rise as larger multinational companies acquire innovative players in the space to capture growth.
In recent weeks, the Company announced that it had entered into a five-year exclusive partnership agreement with Veative Labs (“Veative”) and the National Independent Schools Alliance (“NISA”), India’s largest governing body for budget private educational institutions.
The agreement saw all parties execute an implementation and rollout schedule from last month, which will result in Dev’s Launchyourcareer being utilised by NISA as the platform-of-choice to deliver a minimum standard of career guidance across its schools.
NISA represents over 70,000 budget private schools in India, attended by c.13 million students. Chris Jeffries, Chief Executive of Dev Clever, has described the agreement as “a significant opportunity to support the development of millions of young people in India.”