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AppScatter Group PLC Q&A with CEO Philip Marcella (LON:APPS)

AppScatter Group PLC (LON:APPS) Chief Executive Officer Philip Marcella caught up with DirectorsTalk for an exclusive interview to discuss their interim results, the acquisition of Priori Data, enterprise customers and their strategy going forward.

 

Q1: Philip, you’ve published your interim results for the six months ended 30th June 2018, can you talk us through the highlights please?

A1: It’s been an amazing 6 months, there’s a lot of things that we achieved.

One of the main things that everybody is aware of is acquiring the company Priori Data which we completed just a couple of days after the period, but it did take a while. It has made an absolute difference to the company from a data point of view.

Some of the other things that have been happening in the company, we did do a cash raise which we had to obviously had to raise cash from the markets for the working capital from Priori, we raised that money at a premium to the prevailing share price at the time.

Gross profit, we actually have one. We were in a negative position at the same period last year so at least we’re actually getting cost going in the right place.

Other items that were happening were really about more operational. So, we’ve launched our marketplace, key point to the marketplace is to allow us to add more products on offer to our customers. Some of the products will be added throughout the year with our GDPR app security service and what that actually is is a service where we do all audits for large enterprise clients and identify which one of their apps could be potentially in breach of GDPR or have security breach because nothing updated within for example, 1 or 2 years.

ISO certification was important to us because a lot of the enterprise clients are banks or regulated companies and they are now requiring that anybody handling their data must be certified with ISO.

Lastly, new partnerships, a few we announced, IronSource, Airpush and AppInChina. The difference with a company like AppInChina just means that we can now distribute paid apps if you use our system via AppInChina.

They’ve been a lot of data increases but yes, the highlights keep going on.

 

Q2: So, you just mentioned Priori Data, and this is something that you’ve recently acquired, how is this adding to AppScatter’s operations?

A2: It’s two-fold. There are three forms of data, we hold what we call ‘public data’ which is ranking data on 28 app stores worldwide, that means that we track each app in each store including Google and Apple and each one of the countries and territories that they may be on. The total of apps that we track is below a million apps but actually instances is about 1.3 billion apps are tracked per day. That’s what we call public data.

The results are something called ‘confidential data’ which is actually sales and download information and although we had a small amount of this, Priori had a lot of that data. What that’s important for estimating market intelligence or looking at forecasting, competitors if you wanted to understand how many sales or downloads that they may be achieving then you can use that data.

The third type of data is actually ‘device data’ and that’s literally what apps you have on your actual device, how much time is spent, we also collect your location and we never had any of that. Now, we have it data on 900 million apps across 3.5 billion devices.

So, if you look at the data we’ve got as a result of Priori, you can now see that we’ve got a full suite of data and that allows to, if you like, have a better set of products. Priori on their own were doing very well and they were selling the market intelligence data and our sales were doing the marketing of the app management however, by putting the two sets of data, it allowed us to have new revenue streams including the security.

 

Q3: So, you talked about the increased numbers of enterprise customers section, can you explain what this means for the customer?

A3: What we found that a lot of the companies we were working with, we looked at the small developers and then we started working with the enterprise clients. The enterprise clients, the offering is a lot higher, just in particular, the last one they’re spending 40 odd thousand a month compared to where our developers may only be spending a few hundred a month.

So, we’ve been working on the enterprise clients and the big issue is that takes longer for them to come on board. Usually they’ll be a due diligence of financial and technical and then there is security and assessment, so they take on average 3 or 4 months to actually get to contract stage, but we’ve been having some great large companies, very well known that everyone will be aware of, testing our data, testing our products and we’ll be announcing who they are over the coming months.

 

Q4: What’s AppScatter Group’s strategy going forward?

A4: The strategy has never actually changed, we believe that we’re part of the ecosystem to do with apps. You have tools to build apps, tools to actually manage the building of the app or the teams working on it, you have tools to embed your mobile advertising or your analytics but there are no tools out there to manage your app once it’s ready. Most companies at the moment have a vast amount of apps, car companies have maybe 500 or 600 different apps, large insurance companies have hundreds of apps and they’re different on a country by country basis.

Our strategy has always been to have a platform where once you’ve built an app, how do you manage that portfolio and you need to make sure that you have data in there and you need to make sure that you can manage the distribution. So, what we want to do is build the actual marketplace so there are a selection of products, it’s not uncommon, if you look at any of the large companies, you’ll find they have a marketplace with many products within it to support their key product.

So, we will actually develop the marketplace in three ways. One, by acquisition, by buying products that will help our clients, two, we’ll build them ourselves and three, by partnerships.

So, building the marketplace is our key strategy.