Velpic boosts recurring revenue with new e-learning clients

Provider of cloud-based video e-learning services diversified marketing services, Velpic Group (ASX: VPC) continues to build on its fast-growing client base, announcing on Thursday morning that it has signed eight new enterprise clients to its video e-learning platform.

This brings the total number of clients to 47, and encouragingly they come from a broad range of sectors including pharmaceuticals, energy, industrials and professional services. Chief executive, Russell Francis highlighted the fact that among the most recent signings was the group’s first customer in the education sector, Hume Anglican Grammar.

Velpic tapping into non-discretionary enterprise spending

The main content being accessed by the new clients covers areas spanning safety, education and professional training for employees and customers. This is a promising sign as it indicates enterprises are turning to VPC’s training platforms to address regulatory issues such as safety and education.

New clients include National Pharmacies, a national chain of over 52 pharmacies in South Australia, Victoria and New South Wales with 20 optical stores operating in South Australia and Victoria.

Nabenet is an interesting addition to VPCs portfolio as it is a leading independent provider of injury management and occupational rehabilitation services to workers and employers across Victoria and South Australia. This is a another example of non-discretionary spending which businesses are obliged to fund, indicating the essential services nature of VPC’s product offering.

The fact that the group is being selected by government organisations such as the Energy and Water Ombudsman in South Australia is testimony to its credibility in the industry.

It is still an early stage company, however, and investors should seek professional financial advice if considering this stock for their portfolio.

Francis views the strong growth that has occurred since the company listed on the ASX in November 2015 as an endorsement of the value proposition offered by the group’s e-learning platform.

Recurring revenue growing at a rapid rate

From a financial perspective, new client wins are expected to make a material contribution to VPC’s SaaS recurring revenue stream. This has increased exponentially since the company listed with quarter on quarter growth of 28 percent in the three months to September 30, 2016.

Summing up VPCs progress in 2016, Francis said, “The momentum that the Velpic team has delivered through the calendar year has been exceptional, and enhancements to the platform are being well received by our existing customers while we continue to attract new clients with our superior offering”.

Francis also noted that the shift towards learning management systems to train and educate staff and customers continues to support the traction we’re achieving, and he expects this trend to continue.