On November 1, the CCP Technologies share price stood at 1.7c. After a sharp run-up mid-year (it closed at 3.8c on June 5) with the announcement that two new prominent shareholders, James Spenceley, the founder and former chief executive of Vocus, and Tony Grist, the co-founder and former chair of Amcom Telecommunications, were joining the register, the stock slowly slipped back over the following months.
But on the back of two capital raisings late last year netting $1.5 million that were eagerly snapped up by the market, as well as some significant corporate announcements, CCP is starting to reward its patient shareholders, closing on Friday at 3.8c.
The first capital injection came in November via a private placement that put $500,000 in the coffers of CCP, which offers a critical control point management system in Australia, North America and Singapore, allowing businesses to meet food compliance requirements, cut costs and improve efficiencies. The second followed hard on its heels in December when small shareholders had the opportunity to get a slice of action when nearly $1 million was raised via a share purchase plan.
Going hand in glove with these capital raisings were two key announcements – the signing of partnerships with the publicly listed Dicker Data (ASX: DDR), Australia’s leading ICT hardware distributor, and Sydney-based Channon Refrigeration.
Dicker Data is Australia’s leading ICT distributor with 5000 resellers in its network and revenue of $1.1 billion (FY16). At its 2017 AGM, the Dicker Data announced its intention to offer IoT solutions and CCP was one of the first signed.
Channon is a well-known national supplier of refrigeration equipment and services whose clients span the food industry, including hotels, clubs, cafes, breweries, restaurants, supermarkets, and fast-food chains. Initially, the agreement with Channon’s estimates sales of 2000 monitoring points. CCP announced the first sale via Channon’s in December.
These two agreements expanded CCP’s access to customers in its food industry market. What must be realised is that the potential combined market opportunity for CCP in Australia and North America is estimated to represent 470 million monitoring points. The company charges $15 a month per monitoring point on a 24-month contract.
The respected research house TMT Analytics, in a report on CCP, highlighted the importance of channel partnerships in expediting the company’s commercial roll-out. It also noted these agreements followed a partnership deal with the Shamrock Group – a Minneapolis-based refrigeration, ice and beverage product and service company with 8,500 sales touchpoints.
As Michael White, executive director and chief executive of CCP, said: “By building a strategic partner network, CCP anticipates rapid growth and expansion of its install base. We already have over 50,000 monitoring points in our sales pipeline and by on-boarding channel partners, we expect that number to increase significantly in the coming months.”
The latest development on the CCP front is the release of a new version Smart Tag that connects to the global Sigfox low-power-wide-area network (LPWAN). CCP is finalising the development of a range of LPWAN connectivity options that will provide access to most IoT networks around the world, and expects more partnership announcements over the next few months.
By offering LPWAN connectivity, the CCP solution is enhanced by delivering:
- A stand-alone solution that operates independently of customer infrastructure;
- A long-lasting battery-powered solution that is capable of uninterrupted operation even during power failures; and
- Simple “plug and play” installation.
Investors are clearly responding to these initiatives and agreements. What is keeping the smile on their faces is the how the share price is developing strong momentum with any selling pressure quickly finding buyers. A realistic target for CCP stock by the end of the first quarter appears to be about 5c.
NOTE: the author has a small shareholding in CCP.
