News blog
i-design
- BY: Andrew Hore |
- POSTED: 22/07/2007 |
Cash machine advertising campaigns organiser and seller i-design has floated on Aim and raised £3.5m to expand its activities.
The shares were placed at 67p on 20 July and rose to 71.5p on the first day. The company has developed software called ATM:ad, which enables advertising campaigns to be handled across an ATM network. It is being used on more than 2,100 cash machines in the UK. Advertisers include British Airways, Orange, Nivea and New Look. A new part of the software, called Insight, allows the advertising on the cash machine screen and/or the paper slips to be specifically targeted to male or female or other characteristics. This was launched in April.
There are three sources of revenue for i-design. They are production services, which includes screen branding for cash machines, software sales and maintenance fees, and sales of advertising for the cash machines. The company has two main customers: Nationwide Building Society and HSBC. The latter has only just started to generate revenues.
In the six months to March 2007 revenues doubled £515,000 and £268,000 of this came from the media sales side. This was not far short of the £679,000 of revenues in the whole of the previous financial year. The reported interim loss was £171,000. Ongoing annualised costs are around £900,000. The media sales revenues are included before any revenue shared with the banks who own the cash machines. Only a minority of the media sales revenues will come to i-design after the revenue share and any related sales commissions.
The business still has some way to go in order to get to breakeven although the HSBC contract has just started to contribute. The move towards profitability will also depend on the mix of growth in revenues. Software revenues are much higher margin than media sales. Management is keen to sell the software overseas. Financial software provider Mellon has been appointed to sell the software in Greece. The flotation valuation £9.45m already included significant assumptions about potential growth.
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