Audience Analytics to raise S$5.5m in IPO for overseas expansion, business segment growth

AUDIENCE Analytics, a publisher and awards organiser, is looking to raise S$5.5 million in an initial public offering (IPO) on the Catalist board as it seeks to expand its business in overseas markets and grow its product team.

Audience Analytics organises awards such as the SME100 Awards and the HR Asia Awards, and is seeking to expand its business analytics capabilities by leveraging data that it has collected over the years. It also organises exhibitions such as the JobStreet.com Malaysia Career & Training Fair annually.

The company plans to sell 26 million shares, via a placement, at S$0.30 each for a total of S$7.8 million. Of this, 18.2 million are new shares and 7.8 million are vendor shares.

Audience Analytics' chairman and managing director William Ng said that the proportion of new shares and vendor shares struck a balance between raising the required amount of funds for the company's expansion plans and avoiding ownership dilution.

If the IPO is completed, the placement of shares will represent approximately 15.5 per cent of the company's enlarged share capital of 168.2 million shares.

Audience Analytics will have a theoretical market capitalisation of S$50.5 million - about 17.1 times the company's net profit of S$2.9 million for FY2020. With the number of shares issued, the company would also have a theoretical earnings per share of 1.8 Singapore cents.

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The net proceeds to be raised by the company from the issue of the shares will be approximately S$4.1 million, after estimated expenses of S$1.3 million.

Audience Analytics said it will dedicate S$500,000 of the net proceeds to the expansion of its awards to other markets. An example of this is the expansion of its CXP Best Customer Experience Awards beyond Malaysia, Singapore and Hong Kong to other jurisdictions in Asia.

The company also hopes to beef up its product team so it can conduct the additional market research and product development required to further expand this segment.

Revenue from awards accounted for 95.9 per cent of the group's revenue in FY2020, as Audience Analytics' exhibitions segment was severely disrupted by the pandemic. In FY2019, the awards segment contributed 86.4 per cent of revenue while exhibitions contributed 9.7 per cent.

The group will invest another S$500,000 of its IPO net proceeds into growing its business intelligence and growth analytics services, a new segment that the group intends to explore.

It aims to use artificial intelligence (AI) to create software-as-a-service tools for companies to analyse data on human resource activities such as employee acquisition and performance management. Within this segment, Audience Analytics is also developing a new business analytics product called Velocity. It will offer insights on customer experience.

"We are sitting on an extensive database of businesses and moving forward. What the company wants to do is to try and monetise this database, and growth analytics is the first step in that direction," Mr Ng said at a media briefing on Tuesday.

Another S$500,000 has been set aside to digitise the company's business-to-business publications as Audience Analytics seeks to grow its subscriber base. The company said it hopes to branch out into new mediums such as podcasts.

The group currently publishes SME Magazine, HR Asia and Capital Asia.

A further S$2.6 million in net proceeds will go towards general working capital expenses.

In FY2020, Audience Analytics posted an 8.8 per cent decline in revenue to S$7.6 million as Covid-19 put a halt to its exhibitions.

Revenue from the exhibitions and the business media segments fell by 82.9 per cent and 46.1 per cent, respectively, to S$138,362 and S$174,927.

In spite of the decline, however, gross profit rose by 36.9 per cent while net profit rose by 28.9 per cent. Gross profit margin was 65.7 per cent, versus 43.8 per cent in FY2019.

The company said the cost of conducting virtual events is generally lower as it can save on venue rental, production costs and performance costs.

"We have gained some improvement in margin because of the shift to virtual events ... moving forward, I don't foresee that the world will go back to fully physical events in the short run so we expect that programmes will continue to be conducted on a hybrid basis," Mr Ng said, adding that the company expects to retain at least part of the margin it gained last year.

Audience Analytics also saw positive cash flow from operating activities in the last three years, with FY2020 seeing a marginal decrease in cash flow to S$3.75 million from S$3.76 million a year earlier.

Mr Ng as well as executive director Ryan Ooi will together own 84.54 per cent of Audience Analytics following the IPO, via an entity called Bain Equity.

Mr Ng owns 60 per cent of Bain Equity, while Mr Ooi owns the other 40 per cent.

The directors clarified that Bain Equity's name is a coincidence and is not related to Bain & Company, the global management consulting firm.

Although the company does not have a fixed dividend policy, its directors intend to recommend and distribute 50 per cent of its net profits in FY2021 and FY2022.

The public offer closes at 12 noon on Sept 28. Trading is expected to commence at 9am on Sept 30.