Like the spider in the web
Over the past seven years, the B2B expert from Australia has successfully transformed the venerable publishing house with a combined brand history of 560 years into a next-generation media platform. Today, we are looking at a market leader in digital business-to-business media in the mining, energy and agriculture sectors. The Company's key asset is a database of 8 million contacts of board members and executives from key international industries. The task now is to develop the valuable components into a powerful company with market leadership.
Like a spider in the web, Aspermont is in the process of converting the sophisticated network into paying, digital customer connections. The added value lies in speed, depth of information and relevant provision on many digital channels. The Mediatech company currently serves sectors that employ 22% of the world's population, corresponding to around a fifth of the global gross domestic product. In just 7 years, it has succeeded in transforming itself from a purely membership and advertising-driven company into a digital platform. Today, advertising revenue accounts for only 26% (65%) and memberships already account for 49% (35%) of revenue. Significant additions to the business model are the new areas of events (11% of revenue), research (7%), marketing (4%) and data management (3%). Therefore, the transformation into a modern digital platform is well on the way.
The 2023 financial year at a glance
With the report for the full year 2023, the Australians were able to document a return to their former strength. Due to major investments, including new staff and a necessary write-down, EBITDA fell from AUD 2.3 million to AUD 0.5 million, while revenue increased slightly from AUD 18.7 million to AUD 19.2 million. In a seven-year comparison, revenues thus rose by an average of 9% (CAGR), with the gross profit margin always remaining in the 53% to 64% range. Despite the persistent headwinds in the advertising industry, the Company has now recorded growth in subscription revenues for 29 consecutive quarters. The events segment also showed pleasing growth with revenues of AUD 2.1 million, and this high-margin segment is now to be expanded even further. The key figure for recurring revenue grew to 75%.
Recurring revenue in 2023
The reported net loss of AUD 1.7 million includes the recruitment of new employees in the growing business areas and the write-down of the investment in Blu Horseshoe. This placement arm was integrated into the business model 3 years ago as a test operation. Adjusted for these extraordinary expenses, there would have been a post-tax profit increase from AUD 0.6 million to AUD 0.8 million (normalized NPAT). However, one important key figure continues to rise: average revenue per user (ARPU) increased from AUD 623 in 2016 to AUD 2,037 in 2023. Last year, it amounted to AUD 1,585 per paying customer. Total cash and cash equivalents amounted to AUD 4 million at the end of the year, of which AUD 2.8 million was cash in hand.
Groundbreaking cooperation with media professional and commodities investor Rick Rule
At the beginning of March, Aspermont joined forces with world-renowned media professional and star investor Rick Rule, President & CEO of Rule Investment Media. The collaboration will focus on the Mining Journal Select and Mining News Select event series. Rick Rule will support and participate in the three well-known mining finance events in Sydney, Perth and London, where over 700 institutional and professional investors gather to evaluate a carefully selected group of the best investment opportunities in mining companies. In addition, Aspermont will support and participate in the Rule Symposium in Florida, USA.
Rick Rule began his career in the securities business 47 years ago and has become an international figure in the resource sector. In 1990, Rick founded the Company now known as Sprott US Holdings, which merged with Sprott Inc (SII) in 2011. After 31 successful years, Rick retired from the Sprott business in 2021 but remains the largest shareholder of Sprott. Rick Rule is an active investor and sought-after speaker at mining industry conferences and is a frequent contributor to numerous press outlets, including CNBC, Fox Business News and BNN.
Alex Kent, Managing Director of Aspermont, comments on the partnership: "It is great to be a partner of Rick Rule, who Mining Journal has consistently ranked as one of the most influential people in mining over the past 20 years. Rick is a legend when it comes to investing. He has been a Mining Journal subscriber and Aspermont shareholder for nearly 40 years."
Rick Rule, CEO of Rule Investment Media, commented: "I am delighted to partner with Aspermont in its work on mining research and education. As a stockholder and customer of Aspermont, I have been involved with their products and people for four decades. Our live and online symposiums are comparable in terms of exhibitor vetting and top-notch presentation quality." For more on the media and investment legend, visit: ruleinvestmentmedia.com
Rick Rule is one of North America's most renowned and successful commodity investors, and his opinions are sought and valued in the global investment community. Due to his role as a crowd puller, it can be assumed that Aspermont's event formats will be enriched by his expert knowledge, the number of participants will increase, and sales in the event sector will rise. It will also breathe new life into the area of financing.
Interim conclusion: the ICE has now left the station
Increasing margins, revenue quality and organic growth naturally remain at the top of CEO Alex Kent's agenda. The challenge remains to transform the previously linear growth curve into an exponential development. This could become an achievable goal thanks to the collaboration with Rick Rule. A win-win situation, as Rick Rule is also a shareholder in Aspermont, according to the press release, and the North American can also open doors to the vast investment community in Canada and the US.
In the age of deglobalization, suppliers and customers are looking for new, stable networks, which are of great importance for a highly sensitive high-tech industry. This will gradually reduce the West's dangerous dependence on Eastern-dominated raw material monopolies. Aspermont has made a name for itself in the attractive economic sectors of mining, energy and agriculture. With platforms such as Skywave, Esperanto and Archive, the XaaS business model will be further expanded and the high-margin data analysis and research sector will continue to gain in importance. Aspermont still holds all intellectual rights to the corporate finance business model for small commodity companies. This could now be brought back to life with the existing investment arm of Rick Rule and Eric Sprott. Since Aspermont no longer wishes to increase the number of shares and continues to aim for cash flow-oriented financing, the 2.455 billion shares issued must adequately reflect the Company's future development. Due to the current good prospects in the commodities market, which has been revived since the end of 2023, we believe this will lead to a complete revaluation in the coming months.
The 3-year chart of the Aspermont Media share shows a significant upward movement. After bottoming out at around AUD 0.007, the share price recently advanced to AUD 0.017. The price/sales ratio of 2.1, with organic sales growth of 10% and gross margins of over 50%, is very favorable compared to the peer group. In a current study, the analysts at GBC AG confirmed their "Buy" rating with a price target of AUD 0.07, which equates to a potential upside of around 400% in relation to the current share price.
This update is based on the initial report 01/2022
