QFY pens major deal with Harvey Norman
Quantify Technology (ASX:QFY) has signed an agreement with Harvey Norman’s largest franchisee, Harvey Norman Commercial Division (HNCD), to promote and sell its products in NSW and ACT.
The deal could see HNCD sell in the vicinity of $20-$30 million worth of QFY’s products to commercial and residential development projects, a key market the company has been targeting in its promotional efforts to date.
As part of the deal, QFY will set up a demonstration facility at HNCD’s showroom in NSW to take advantage of HNCD’s widespread sales network. The agreement includes the potential to consult Harvey Norman’s other commercial franchises in other states as part of creating a country-wide sales pipeline.
With a market cap of $4.34 billion, and with operations spanning New Zealand, Europe and south-east Asia, Harvey Norman is Australia’s largest furniture and household appliance retailer, which makes today’s announcement a potential catalyst for QFY share price movement.
However, QFY’s commercialisation ambitions are still in the early stages, so investors should seek professional financial advice if considering this stock for their portfolio.
As a result of the new agreement, both HNCD and QFY estimate potential sales of $20-$30 million per year over the next three to five years. Formal distribution and supply agreements are still being finalised, with contracts specific to projects and/or individual developers.
The deal means that HNCD will extend its building automation offerings to new and existing customers, primarily large scale builders and developers in the high rise and home builder sector. Many of its existing customers are looking to include Internet of Things (IoT) technology into their developments as demand increases.
A major boost to QFYs commercialisation program
Today’s news is set to significantly accelerate the company’s commercialisation program as it provides entry to an expansive network of HNCD’s customers, consultants and contractors. HNCD NSW/ ACT is the single largest Harvey Norman franchise and provides an extensive selection of brand name products to builders, developers, architects and designers, with a projected turnover for this financial year of $300 million.
Regarding the announcement, QFY Managing Director Mark Lapins said: “We see enormous potential in partnering with HNCD. This deal significantly advances our commercialisation efforts and gives us a large pipeline of residential project customers in NSW and the ACT and potentially, Australia-wide.”
HNCD’s Principal, Alan Stephenson said the following: “Harvey Norman enjoys a strong market and a loyal customer base supported by an extensive sales and marketing team. We see increasing demand from customers for Home Automation solutions and Quantify Technology, at that cutting edge, will allow us to enhance our reputation of supplying and supporting leading brands. We think this Agreement will significantly enhance the value we offer our clients”.
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