At the Annual General Meeting of the Company to be held at 11:00 today, Deborah White, Chairman will make the following statement:-
The Board would like to take this opportunity to update shareholders on a number of strategic and commercial developments across the Company.
In line with the focus of developing Milestone into a digital media and technology business, the Company recently expanded its technology capability with an extension to its existing arrangement with Black Cactus Holdings Limited. The result of which sees the Nexstar joint venture obtaining the global exclusive rights to market and commercialise the current IP developed and owned by Black Cactus.
Nexstar's suite of technology-based products focuses on two verticals - media publishing & distribution and Fintech, both having significant addressable growth markets whilst being complementary to the Company's target audience of young people and Passion Project partner distribution network.
Since the year-end there have been a number of developments with several key product components now completed. These include - in media publishing & distribution, the Alchemy platform which was officially launched at the Apprenticeships4England annual event in March 2017, followed by Nexstar's first stand-alone integrated Social Media and Analytics tool, which enables in-depth analysis of social media performance across multiple platforms with enhanced royalty tracking functionality for its music publishing and distribution services scheduled for delivery over the next few weeks.
Since the year end Nexstar also entered into a joint venture with Self Made, a UK-based music company. The objective of the JV is to combine Self Made's music industry experience and growing body of music artists with Nexstar's music publishing, distribution and analytics platform. Nexstar owns 51% of the JV, which will generate revenue from an initial set-up fee from the artist along with an ongoing royalty payment of between 15% and 25% of each purchase or stream of the content by visitors to the artist's site or third party services including iTunes, Google Play, Deezer, Spotify, Tidal and more.
On the Fintech side there have been significant technical and operational developments resulting from an extension of the Black Cactus partnership with Benefits on Madison, Inc in Toronto, Canada in late 2016. This extension has provided Nexstar with the opportunity to offer its clients an attractive and growing range of exciting additional products and services encapsulated in an offering called "BankHub".
BankHub has been developed as a cash management treasury platform that provides backend services to banking institutions, both domestically and internationally. The system is able to manage a wide array of financial transactions, including deposits, transfers, cheque cashing, ACH, Check 21, SWIFT Transfers, AML and KYC compliance.
The product was developed to optimize payment efficiency, to automate and keep track of a large volume of transactions, reducing the timeframes between payment and cash availability. BankHub tracks every transaction and assembles all management tasks under one platform to monitor activity for reporting and business intelligence purposes. The technology is available and easily adapted to any type and size of business, which in turn helps them become more competitive and innovative.
As notified in recent announcements Nexstar is in the process of embedding blockchain technology into the product development roadmaps of both verticals, which positions Nexstar to leverage the benefits and advantages for both current and future Nexstar clients especially as blockchain becomes more widely adopted throughout the Fintech and Media industries.
Black Cactus / Nexstar's development uses Ethereum, a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference whilst rendering intermediaries obsolete.
The implementation phase of the pre paid contracts announced in late 2016 coincided with the expansion of the Fintech division's product offering and as a result the clients requested that the solutions be reviewed to better suit their longer term requirements and objectives. The availability of the additional features detailed earlier including international transfers and other Forex capabilities has required additional time and resource to be dedicated to the project. This change of functional specification has resulted in delays in the activation timetable. The clients are currently proceeding through the BankHub activation process and the Company will announce when activation occurs.
Nexstar is now generating initial revenues from its media suite of products both from media publishing and distribution. The Company announced its first publishing deal with Amazon Prime for the film "Brash Young Turks" in October 2016, which it expects to follow with further film publishing deals during 2017. Although that the revenues generated at present are modest, the Company expects these to grow as its media suite of products gain traction in the market.
The Passion Project pilot engagement programme 'Divert', which is run by the Milestone Foundation in conjunction with the Metropolitan Police has secured £100k to support delivery in Brixton and Bethnal Green, with a further £100k committed subject to due diligence. It is anticipated that the project will develop across London providing the Company with a marketplace for the development of additional education and training products.
The product range continues to expand the number of registered users, with recent contract renewals with Charlton Athletic Community Football Trust and STM security. The functionality offered, whilst being of significant operational value, also facilitates the capture of key data providing valuable evidence of engagement and outcomes, essential when looking to secure potential grant or social impact funding. This functionality is being developed by the Company for use by the Milestone Foundation as part of the management and delivery of the Divert programme.
The Company's in house digital agency is now actively engaging with external clients as a result of the referrals generated through a growing pipeline with recent contract wins helping to build revenues for the Group.
Following the appointment of Oliver Horton as Editor in April 2016, the magazine re-launched in October 2016 with its Winter issue, alongside a updated website. This was followed up by the Spring release in February 2017, with the magazine now available and generating sales via online purchases for the first time having established an audience both here in the UK and in the US.
DEVELOPMENT STAGE COMPLETE
The Board is pleased with the developments during the period and particularly since the period end. Each of the separate business offerings has begun validation of their revenue potential with growing interest being shown from an expanding customer base and further new revenue streams visible in the near future.
We are at an exciting juncture with revenue generation across the Company gaining traction and I look forward to updating shareholders on our progress.