Amino Technologies plc (LON:AMO) Group Chief Executive Officer Donald McGava caught up with DirectorsTalk for an exclusive interview to discuss their performance for this year, benefits of accelerated streaming services, signing new customers, reinstating the dividend and how the business is looking going into the new financial year.
Q1: 2020 has of course been a challenging year for many businesses, how would you characterise Amino Technologies’ performance this year?
A1: 2020 has been an unexpected and probably an unprecedented year for everyone and thanks to everyone, the amazing efforts of everyone in our business. We’ve really delivered a very resilient performance and we’ve continued to make progress against our strategic goals.
We’ve continued to generate cash as you’ll see from the trading update, we’ve improved the quality of our earnings, the higher margin software revenues up 50% to $20 million and our ARR is up 15% to $11 million so good progress on those. We are also continuing to say new customers despite all the challenges of lockdown.
Through 2020 we followed the wisdom that if we look after our employees, our employees would look after our customers and that meant that our customers took care of the business and this is really reflected in the results.
We’ve got an amazing team across the globe, they stayed close to the customers throughout the pandemic whilst all working remotely and I’m really proud of how everyone stepped up and continue to innovate and to develop our software-led solutions and designed to fit with our vision, to make it easy for people to connect to the TV and the video that they love.
Q2: Now COVID-19 has really accelerated streaming services this year, how have you experienced this development and how have you seen the benefits?
A2: It’s correct really, COVID-19 is thought to have accelerated the rise of streaming by up three years but the biggest challenge in our industry is really to provide the best of both worlds. This convergence of video on demand streaming services with live TV, which is what all modern consumers really want, and that’s exactly what we’ve been doing. So, we’re a software-led media technology company that delivers these modern TV experiences.
What we’ve aimed to do, and what we do is we simplify the complex, enabling the end consumer the choice, the usability, and the convenience that they crave and that means that we’re helping our customers, Pay TV operators, broadcasters, media, and content owners to deliver exactly what viewers want and to provide that smarter and more cost effective way of delivering that modern TV and video experience.
So, our progress with our existence streaming customers and existing customers and in signing new customers during the pandemic really shows that this need has only accelerated during and with COVID-19.
Q3: As you said, you’ve been able to secure new customers during the pandemic, can you tell us a bit more about the customers that you’ve signed?
A3: Well, we really have overall witnessed a real increase in demand for TV and streaming services during the pandemic and we’ve got a number of new customer deals that we announced or that we launched during lockdown.
Earlier this year, we launched Youfone, an end to end service in the Netherlands and Topic, a new media content provider in the US, we’ve had the Canadian hockey league and some of our existing customers are expanded quite significantly. People at BroadwayHD and Pure Flix, who have seen their business move forward in the period.
As we are really a geographically diversified business, lockdown restrictions in some cases, in a strange way, have made it more acceptable to meet new customers virtually rather than have to be there face-to-face. Also. the investment we’ve made in the time spent with customers pre-COVID has also helped us as well.
This is down to an amazing, globally diversified team all across the globe, they’ve really stepped up whilst they are working remotely and continue to innovate and secure these new opportunities for us.
Q4: Has working virtually helped or complicated these new customer deals?
A4: Clearly, it doesn’t make things any easier but the fact is we can seamlessly drive the business remotely so employees are used to doing that, they’ve just worked very, very effectively. We find new ways of doing things so reaching out to customers to get engaged with customers, we’ve deployed tools across the globe, we’ve done some of that free or charge during the most extreme cases of COVID to try and help our customers out as well.
Q5: Now, I see that you’ve also reinstated the dividend, why do you feel now is the right time to do this?
A5: To continue to provide strong shareholder returns is really important to me, it’s really important to us and, as a Board we’ve thought long and hard about it, as you would probably expect. We are very cash generative debt-free business and we believe that now is the right team and the right quantum to meet our objectives and really just deliver value to shareholders, not just through the growth that we’re indicating but also through these dividends as well.
Q6: We’re approaching 2021, how is the business looking for the new year?
A6: I genuinely believe that our business and our culture are a lot stronger today having pulled through all of this, the COVID disruption etc. together as a team. We’ve really got a very clear strategy for growth, we’ve delivered a very robust performance this year in what was a challenging year and our confidence in the future is shown in that Board decision to reinstate the dividend and the new dividend policy. We enter a new financial year, we’ve got enhanced visibility through this acute focus, we’ve got to improve our ARR and drive our long-term customer relationships.
So, that clear strategy, the proven track record of expanding our addressable market, both organically and through targeted M&A means that we feel well-pleased heading into 2021, and we’ll continue with the strong levels of cash generation and shareholder returns as we go forward.
Q7: What gives you the confidence looking into next year?
A7: If we look at the whole market dynamics where we’ve positioned Amino Technologies in that sort of best of both worlds, that convergence of streaming services and TV, we see a great opportunity for growth. We see a great need for the kind of solutions and services that we’re delivering through ourself through our software and solutions so that just gives us that confidence.
