YPB delivers on all fronts
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
Anti-Counterfeit and Customer Engagement solutions provider YPB Group Ltd (ASX:YPB) nailed the trifecta in the March quarter, achieving a 39% increase in quarter on quarter cash receipts, reducing the costs of goods sold and resultantly delivering enhanced gross profit margins.
YPB is targeting a growth industry through its proprietary technology suite that provides certainty of authenticity and connects brands directly to consumers enabling new levels of market intelligence.
In an evolving marketplace and with the rapid growth of cross border commerce, YPB’s expertise currently focuses on the rapidly growing consumer markets of Australia, South East Asia and China.
With cash receipts from sales up nearly 40% and further growth in the pipeline, along with a general overhead expenditure reduction of 12% that is now potentially sustainable, the company’s financial stability and growth potential is clearly evident.
Earnings update imminent
Given YPB has a market capitalisation of $7 million, the company appears to be punching well above its weight.
However, this may not be the case for much longer with management poised to provide an earnings update in the June quarter, a potential share price catalyst.
The sustainability of decreased overheads appears fairly well assured with management saying, “Reduced costs reflect the positive flow-through of the operational streamlining initiatives that took effect from October 2018, as well as further headcount reductions made in January 2019.”
From an operational perspective, cash from sales was boosted by the payment receipted from a significant order placed in the previous quarter by one the group’s key clients in relation to the application of YPB’s anti-counterfeit mark on one of the world’s most issued passports.
From a broader perspective, the March quarter result was assisted by a larger proportion of earnings being generated by higher margin anti-counterfeit sales with a lower contribution from lower margin retail anti-theft products.
Sales initiative is to drive revenue growth
The sustained activities of the newer sales team members appointed over the last two quarters are starting to flow through to the pipeline numbers, indicating the potential for sustainable sales growth.
An uptick in the effectiveness of sales activity has been assisted by key appointments that come with strong sales and industry experience.
Management said that the company is receiving excellent feedback from its current and prospective clients and distributors.
The industry-driven refinement of YPB’s products particularly in the wine and broader caps and closures space is starting to yield early results, with the promise of significant distribution by packaging and product producers.
Management expects to be in a position to update the market in the coming weeks on several of YPB’s major initiatives that it anticipates will materially contribute to the group’s earnings performance in the 2019 calendar year.
Should the company provide a clear and positive near-term earnings outlook this could result in significant share price momentum in the June quarter.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.
