4Global CEO on the robust pipeline & significant book revenue (LON:4GBL)

4Global plc (LON:4GBL) Chief Executive Officer Eloy Mazon caught up with DirectorsTalk for an exclusive interview to discuss their latest trading update, sales pipeline, contract wins, performance in H2 and what investors can expect in the coming months.

Q1: 4Global have released a positive trading update recently, could you just talk us through the highlights?

A1: We released on the 27th of September as part of AGM that took place on that day., and we’ve had a very encouraging year to that point.

I think our book revenue that we announced there was £3.3 million against market expectation from the analyst of £6.7 million, and more importantly, we anticipate that our second half of the year is going to be very robust, as it has been in previous years.

We’ve got a total pipeline, this is an opportunity pipeline that obviously needs to be converted, of about £8.5 million, of which, if all converted, £5.3 million will fall within this financial year.

So, as we said on the trading update, what we’ve seen is that the demand continues to be strong from our customers in all regions for our technology, our data and our services, so we’re very encouraged for the year so far.

Q2: Could you tell us or provide us with more details on the sales pipeline that you mentioned, the £5.3 million? For example, what stages the potential deals are in and what the expected timeline is?

A2: So, we’ve got deals, as you can imagine, at multiple stages but we’ve got a significant amount of that pipeline that sits at the moment, either our contract negotiation stage or at proposal stage.

So, I think when we talked about pipeline, these are not revenues that we’re pursuing in the hope that there will be an opportunity, these are actual opportunities with either existing customers or potential customers with whom we’ve got a relationship.

We’re actually talking about specific opportunities, that’s the way we manage our pipeline. Anything that is what we would class as a target, something that we think we can do for our customers in the near future, although we track those and put them into our CRM systems, we don’t class that as a pipeline opportunity at that stage.

So, all of our pipeline is made up of specific opportunities, of which, as I said, a significant amount at this stage is at the contract negotiation or proposal stage, which is very encouraging.

Q3: Could you talk us through the contract wins that you’ve announced and what they mean for the business?

A3: We’re really excited about the announcement today because, also in the context of the overall growth strategy, they’re really important and they’re really reaffirmed that we’re on the right track.

So, in the Middle East, which is one of the core markets that we focus on, we made a commitment a long time ago to develop that region through partnerships. When we looked at the complexity of doing business in the regions and the size and the scale of some of these contracts and the challenges that are involved, we felt that for us, it would be more successful to really spend the time identifying key commercial partnerships that will drive benefits for both of the organisations.

That’s what we did and we’ve got two fantastic partners in the region. One is MACE, which is a British company with whom it’s not just in the region, but globally, we’ve got a partnership with them, a fantastic organisation. The other one with Al Jassra, which is a locally based organisation, but also operating internationally, and this contract is with that one.

So, I think that is really reaffirming that the strategy that we’re following in the Middle East, it is working. We continue to win contracts through our partners, and we continue to really reaffirm and establish our presence in those markets.

The business win with Guadalajara is direct business, it’s not through partners. We’re really excited because this is one of the multiple World Cup cities that will be hosting the 2026 FIFA World Cup in the North American continent.

What we’re doing with them is they are looking at the World Cup tournament as an opportunity for transformation for the city. One of the areas where they want to really drive transformation is around getting the citizens active because of the huge amount of social value and savings that that brings to the city, as well as benefits to the citizens.

So, in order to do that, they need data to understand where the opportunities for investments are, but also, they needed a platform to really draw that insight so they can monitor and evaluate how those investments are performing. More importantly, to be able to communicate to the citizens and to other investors the results of that.

So, this is a solution that we’re offering to Guadalajara, which we hope is, well at this stage is phase one, but it will result in a multi-year relationship with them. That is replicable to all the other cities in the World Cup and one that we are actively engaging with other World Cup cities, as well as any other cities that is hosting events.

It’s about capitalising on that huge data asset that we’ve built and the insights that can be drawn from that to make the right decisions, whether it’s for private organisations or public sector organisations.

Q4: You have historic significant H2 weighted in financial performance, why is that and what measures are you taking to ensure strong performance in the second half of the year?

A4: So, traditionally that’s always been the case, and I think it’s more symptomatic of the industry in which we operate, that runs from the 1st of April to the 31st of March, in which the first half of the year there is a little bit of hang over from the Q4 in our customers. You’ve then got the summer months, which everything slows down to then pick up again in September, going to Q3 and Q4, and it’s something that we’ve seen.

I think as we move more towards annual recurring and repeatable revenue, which is certainly a transition that we’re in the process of doing, and that weighting of the revenues between H1 and H2 will start to become smoother with time.

In terms of the measures that we’re taking now, I think, as I said on the trading update, I think the robust pipeline that we have and the fact that we already have significant book revenue in, that puts us in a strong place to face H2 like we have done over the years.

Q5: What can investors expect from 4Global in the coming months, do you think?

A5: I think more of the same. I think the really exciting thing about our business is, first of all, we are hopefully building a reputation to do what we said we were going to do in terms of the numbers and in terms of what we can achieve. We are going to continue to do that, that’s certainly our commitment to our investors and to the market.

I think from a commercial point of view, we’re seeing a very strong demand coming through the international markets, particularly the Middle East and the North American markets. We are looking at capitalising in some of those great relationships and partnerships that we’ve built and activating commercially those partnerships.

From a product and data point of view, we’re going to continue to grow it and we’re going to continue to grow our data asset, which is, in our opinion, unique out there and certainly the biggest one that we are aware of but we’re also going to be looking at new technologies.

You might have seen that we made an announcement that we are exploring with some of our customers the use of AI to draw the insights. Again, we’re looking at technology like AI, not as a buzzword that we can just put a label on our offering, but really to see what is the value that it adds to our customers, and how they can maximise the commercial benefits from having access to insights generated through AI. Either because it generates deeper insights or whether because it’s much easier to use and therefore, they can utilise more and more within their organisation, and that’s the title that we’re currently running with one of the biggest operators here in the UK.

So, I think a lot of excitement in our business. We’ve grown very rapidly, we’re in a really exciting space, we’ve done all the hard yards of developing the technology, developing the platform, and now we’ve just got to execute on our strategy as we have been doing, so that the growth continues to be the limit.

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