Big Sofa order book surges in first half

Video analytics provider Big Sofa Technologies continued to build on the positive momentum it saw in 2017, investors heard on Tuesday, as its order book of work commissioned reached almost £1m in the first half of 2018.

The AIM-traded firm, which was holding its annual general meeting, said that represented a mammoth 91% improvement on the same period last year.

Chairman Nicholas Mustoe told shareholders that 2017 was a year of “significant strategic progress”, with the company focussing on the “transformation” of its client base through the securing of global partnerships with multinationals such as Ipsos and Procter & Gamble.

Mustoe said those relationships were now coming to fruition, as the firm fully embedded ots platform, securing “larger and more diverse” projects, which in turn were increasing the company’s revenue visibility.

“There is significant scope within our core client base to generate material revenue growth as our technology becomes central to their consumer insight processes,” Mustoe said.

On the surge in order book value, Mustoe said it had been broadly driven by an increase in the average project size, with larger projects starting to give more visibility over future revenues.

“While many of these projects are pilots, the size of the pilots provide an indication as to the potential full scale commercial opportunities for Big Sofa in the medium term.

“We believe the increase in the average project value indicates a deepening of our existing customer engagement, in addition to winning successful partnerships with strategic new customers.”

In March, Big Sofa received an investment from Ipsos - one of its largest customers - which Mustoe said further validated the business, its underlying technology and the broader potential of video analytics.

That had enabled the company to continue to develop its owned-IP, which he said was “central” to Big Sofa becoming a software-as-a-service (SaaS) based business.

“To this end, we have already successfully secured subscription revenues from the likes of Target and 84.51˚, which we are looking to build upon and thus gain enhanced visibility over future earnings.

“Furthermore, we continue to progress the productisation of our solutions, with our market offering now including Video Observer, Video Manager and Video Stories, which we believe have long term potential to generate high margin recurring revenues.”

Significant improvements had also been made to Big Sofa's platform to increase its robustness, scalability and accessibility, ensuring the firm would be able to deploy its technology globally and enable clients - which Mustoe said were typically large multinationals - to extract maximum value from their video content anywhere in the world.

“The board is positive about the medium term trading prospects of the company as we build upon our existing client relationships, forge new ones, invest further in our technology and IP, and leverage our broadening product stack to generate material revenues as we continue to see the proliferation of video for use in consumer insight.”