YPB to focus on food, beverages and drug markets

By Trevor Hoey. Published at Jul 1, 2019, in Technology

Product authenticity and consumer engagement solutions provider YPB Group Ltd (ASX:YPB) has provided a comprehensive business update, highlighting that its most important milestone on the ‘technical roadmap’ continues to be the progression of the globally unique and highly protected IP suite that is ‘Motif Micro’.

The much-anticipated curved-surface smartphone readability of Motif Micro is in the final stages of testing.

YPB believes that there is significant potential to license as well as attract early adopters as soon as the first commercial release is technically possible.

YPB expects to update the market on this milestone early in the September quarter.

From a corporate perspective, the company has made strong inroads in terms of decreasing monthly expenditure following an organisational restructure and the introduction of operational efficiencies.

The full extent of the savings is expected to be realised in the September quarter.

Following a review of YPB’s current sales activities and prospects for the greatest sector adoption of its products, the company is proactively targeting the food & beverage, pharmaceuticals and cannabis sector.

These industry verticals demonstrate the need and willingness to adopt YPB’s solutions and the company is focused on expanding the client base through leveraging its existing distribution channels and its success to date in these market segments.

The total remuneration costs alone from June quarter 2018 to June quarter 2019, have been reduced by circa 46%.

As part of this reduction, the non-executive directors have moved to zero cash as a sign of commitment and support for the broader restructure and future of the company.

The sales team has been consolidated under experienced sales leadership that is driving a renewed focus on key operational areas.

Revenue growth in China

As part of this renewed focus, the group has been working with its key channel partners to set operational plans for the distribution of YPB’s products.

These efforts began and have already started to flow through to results in China where revenues have materially increased as reported at the recent AGM.

Further reinforcing the success of YPB’s entry into south-east Asian markets, management has appointed its first sales agent in Indonesia.

PT Meidanum Imperii intends to sell YPB’s solutions into medical equipment and packaging in the beauty, cosmetics, food & beverage and baby products sectors.

The principal of this company was introduced to YPB through a working relationship with Combiphar, one of YPB’s existing major clients.

Combiphar has been the major contributor to the revenue growth from the YPB Connect Platform with further contribution from the adoption by the Cannabis accessories sector that has expanded across a number of product lines sold through e-commerce platforms where product authenticity is a key issue for brands and consumers.

YPB’s recent successful commercial launch of the Vintail technology with Seppeltsfield Wines is a major milestone that the company sees as a new standard for wine exporters looking to protect their brand, their business and their consumers.

In second half 2019, the sales team will be looking to capitalise on the launch with a view to extending the adoption of the Vintail solution in the wine industry.

Blockchain enabling Connect Platform

YPB believes that the immutable ledger made possible by the incorporation of blockchain is a logical fit for product authentication and management is reviewing third party service offerings that can “Blockchain enable” the Connect Platform.

This may strengthen the brand and consumer perception of authenticity through recording key data points including scans of YPB’s products on the blockchain.

Adopting simple third party plug-ins rather than developing a Blockchain solution in-house, allows YPB to concentrate its research and development investment in its IP suite.

YPB is in discussions with its stakeholders including clients and distribution partners to determine the timing and nature of the future incorporation of Blockchain into the Connect Platform processes to ensure that the commercial case is clear before proceeding.

The launch of Motif Micro is a potential share price catalyst, indicating that the September quarter update will be an important development.

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