OneMove Technologies Inc. ("OneMove" or the "Company") (TSX VENTURE: OM), the provider of the leading web-based real estate transaction platform and the creator of the largest and fastest growing online community of conveyancing professionals, announced today its financial results for the three and 12 month periods ended June 30, 2012. All figures are reported in Canadian dollars.
Fiscal 2012 Highlights
-- MLS® listed sales in BC remained flat from 74,000 to 73,000 from fiscal 2011 -- Revenue increased 20% or $368,000 from $1,884,000 to $2,252,000 from fiscal 2011 -- Transactional volume increased 16% or 12,000 from 62,000 to 74,000 -- Daily average revenue increased 17% or $1,500 from $7,300 to $8,800 -- Member firms increased 20% or 124 from 505 to 629 -- 98.2% retention rate of user/members for the past 2 years -- Ongoing business expenses increased from $674,000 to $996,000 from Q4 of fiscal 2011 as a result of the expansion of the sales team, changes in the executive team and implementation of strategic advisory recommendations
Fiscal 2012 Q4 and Year End Financial Summary
Q4 Q4 FY FY % FY FY % 2012 2011 Change 2012 2011 Change Revenue $698,000 $587,000 19% $2,252,000 $1,884,000 20% Adjusted EBITDA(ii) $(133,000) $(20,000) (565)% $(279,000) $(385,000) 28% Net Income (loss) $(262,000) $(98,000) (167)% $(756,000) $(815,000) 7% Net Income (loss) p/s $0.00 $0.00 0% $0.00 $0.00 0%
Background
Econveyance, OneMove's core offering, is Canada's only entirely web-based collaborative data platform. It has transformed the paper-based property transfer process into a completely integrated electronic exchange environment for lawyers, lenders, insurance companies, realtors, buyers and sellers. All users have a secure and efficient means of monitoring and completing the real estate buying or selling transactions online. The fact that econveyance operates in a web-based platform allows it to avoid the significant duplication of entries. Being web-based allows it to unleash the full potential of crowd-sourcing, generating further productivity gains. Last but not least, by allowing users to share the same data and data sources, it generates 'network effects' that, it is hoped, will concentrate users around the prevailing technology.
The fact that econveyance is web-based allows OneMove to position its product as enterprise software or SaaS (Software as a Service) and command a premium price by taking all the IT management and maintenance of software out of the customer's hands. SaaS platforms represent the future of technology and many companies, small and large, are embracing this model at exponential rates.
Operations in BC and Alberta
The competitive environment in BC, with an entrenched competitor, does not allow for immediate sources of significant growth as compared to Alberta. Furthermore, the BC real estate market is showing signs of significant weakening, hence Managements focus on expansion in Alberta, which is recognized as the third largest market in Canada next to Ontario and British Columbia, processing approximately 80% of the transactional volume compared to the BC market.
The Alberta market is in a different economic cycle than BC, which is arguably fuelled by pressures such as heavy immigration and investment from Asia. Alberta's real estate is buoyant due to mining, oil and gas investments in the region and it is hoped that its market growth, as well as its plans to move to mandatory electronic land registry in the future and as is the case in BC, will allow for positive growth of econveyance.
This organic growth of last fiscal year was supported by a sales team stretched in BC and Alberta consisting of 1 to 2 sales reps depending on the time frame. Management has recently hired 5 sales reps and trainers as well as a marketing manager to fuel our growth in Alberta. The roll out of projects, such as large volume conveyancing that is due at the end of the calendar year 2012, is expected to bring more revenues once fully operational. The impact of such initiatives should compensate for potential revenue losses in BC and is expected to be completed by early 2013.
Financing
The Company has not reached break even operations in fiscal year 2011/2012. As such, a fresh capital injection was needed and the Company successfully raised $1,146,000 in a private placement in March of 2012. This private placement is being used to restructure the Company and focus on a more aggressive eastward expansion.
In order to facilitate the Company's ability to attract management, future financing and transactions for the Company, the Board implemented the share consolidation approved at the Company's Annual General and Special Meeting held on November 25, 2011. The shareholders passed a special resolution approving the consolidation of the Company's issued and outstanding common shares on the basis of 10 shares being consolidated into one share such that for each 10 common shares of the Company presently held by a shareholder, the shareholder now holds one common share post consolidation. Depending on the market conditions, the needs of the restructuring plan and the success of the commercial initiatives, management expects that more financing may be needed this fiscal year.
Management changes
As announced at the beginning of this calendar year, Mr. Martin Johnson, the Company's CEO since 2005, resigned from his position in April 2012 following health issues. He was replaced by Mr. Parminder Virk, the Company's COO and CTO on an interim basis.
In August, the Board appointed Mr. Serge Salager to take over as CEO. Mr. Salager, a Harvard MBA graduate, has experience in venture capital (was an Investment and Portfolio Manager at Inventages, Nestle's global strategic fund manager with $1.5b in committed capital) and sales and marketing (at Procter & Gamble and Affinova).
Subsequently, Mr. Parminder Virk resigned from his position as COO and CTO of the Company to take some well deserved time off to spend with his family. Mr. Virk remains an important shareholder and will stay involved as a consultant to help ensure the Company's future success.
Strategic review and growth prospects 2013 and beyond
In May, the Board initiated a review of strategic and financial alternatives available to the Company and engaged a financial advisor to explore options to maximize shareholder value including a potential sale of the business. After reviewing the different alternatives, the Board concluded that none of the offers discussed were adequate at this stage and that it is in the best interest of the shareholders to continue to create value by executing the Company's expansion plans.
It was clear from this review that OneMove has developed one of the best electronic conveyancing platforms globally and that it has achieved a benchmark tool which will be very difficult to match. Much of OneMove's growth, to date, has been organic with very little investment in sales and marketing. The Alberta roll out was a success from a technology development standpoint. Due to resource restrictions it was only supported by 2 sales reps with minimal marketing materials and budget. OneMove now has the resources and has expanded its sales team and increased the marketing budget, which should benefit sales revenue growth going forward.
OneMove enjoys high gross margins, as the cost of distribution and customer support are insignificant. This move from a software development company to software sales will enhance profitability as the gross margins are much stronger than that of a software development company. Software companies rely significantly on first mover advantage and continuous expansion to lock-in customers. Newcomers with breakthrough technologies can win over incumbents if properly funded. As such, OneMove needs to invest in growth if shareholders want to be able to extract value from their investments. The recent private placement towards the end of the fiscal year is the first step towards focusing on transforming OneMove into a commercial organization with undivided attention on growth and expansion.
The current management team is working on finalizing the restructuring and expansion of the Company. This will be done with prudent emphasis on speed as per the reasons alluded to. Part of the expansion plans are to launch in Ontario, a market 3 times the size of BC. This will require further funding or smart partnership deals to be able to capture the converyancing market and create value for the shareholders of OneMove.
Full financial statements and MD&A for OneMove will be available at www.onemovetech.com and www.sedar.com
(ii) EBITDA is used internally by the Company to compare cash operating resulted from one period to another. EBITDA for the purposes of this analysis also excludes stock based compensation, shares issued for services and "Other income/losses" per the financial statements. EBITDA does not have any standardized meaning prescribed by GAAP and therefore may not be comparable to similar measures presented by other companies.
About OneMove Technologies Inc.
OneMove Technologies Inc. (TSX VENTURE: OM) is the leading provider of web-based real estate transaction platforms and the creator of the largest and fastest growing online community of conveyancing professionals. Through econveyance?, its proprietary web-based conveyancing software solution, OneMove? simplifies and expedites the process of buying and selling real estate. Econveyance connects all participants in the property transfer process, offering a secure and efficient means of completing the transaction online. Additional information about OneMove can be found at www.onemovetech.com or www.sedar.com. Professional users site www.econveyance.com.
Forward Looking Statements
This press release contains certain "forward looking statements". These statements relate to future events or future performance and reflect expectations and belief regarding growth, results of operations, performance, business prospects, opportunities or industry performance and trends. These forward looking statements reflect current internal projections, expectations or beliefs and are based on information currently available. A number of factors could cause actual events or results to differ materially from the results discussed in the forward looking statements. Although it is believed that the forward looking statements contained in this press release are based upon reasonable assumptions, investors cannot be assured that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date of this press release, and OneMove Technologies Inc. assumes no obligation to update or revise them to reflect new events or circumstances, except as required pursuant to applicable securities laws.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts: OneMove Technologies Inc. Serge Salager CEO
