Swift Networks Group Ltd is an ASX-listed tech company that delivers entertainment and communications solutions to the mining, oil and gas and aged care sectors. Swift’s current product portfolio includes its premium Swift Access product, powered by its proprietary low bandwidth technology, which enables the delivery of entertainment and communications curated specifically to the requirements of a community such as residential aged care communities, mining villages or even an oil rig. Swift Access supports those responsible for managing these diverse communities. The beauty of Swift Access is that it can transform any TV into a portal for the delivery of innovative technology and a fully customised entertainment and communications solution…think a Smarter smart TV delivering both premium entertainment and information about your company to the end user.
Brian Mangano is the Managing Director of Swift Networks (ASX: SW1). Mr Mangano sat down with Lucas Robinson – Managing Director of Investor Relations Consultancy Corporate Storytime - for an interview feature in Business News.
Brian you’ve been leading the business now for 2 years, what are the key changes that you have made to turn the business around?
Motivated by a focus on margins and with the support of Swift’s board of directors, two years ago, we embarked on a conscious effort to focus on R&D and the launch of a premium product, Swift Access, into our current core sectors.
In mining and resources, we focused on working with our tier 1 customers to develop a market-leading solution with features to address the specific needs of the industry to help drive up value and differentiate our product. Whereas the company had previously depended on a model which saw us re-sell entertainment-only subscriptions into mining camps at low margins, we now have a premium entertainment and communications solution that is highly customisable i.e. it can act as an extension to a company intranet, to address the increasingly regulatory Work Health and Safety requirements, and unique technology to enable a reliable and stable solution even within very low bandwidth environments.
Concurrently, we have been developing the next generation of Swift Access, which will include the Aged Care Engagement (ACE) platform, due for commercial launch in CY 2024. We’re particularly excited about the benefits ACE can deliver to aged care facility residents and their families. ACE will introduce unprecedented customisation and personalisation into the Aged Care market (see more below). ACE will also support easier integrations with technology ecosystems, as recommended within the Government’s recent Aged Care Data and Digital Strategy. In preparation for the launch of ACE, we have recently introduced a Swift Access Engagement subscription package, which is gaining significant traction in the market and will also pave the way for the potential for ACE to penetrate the huge global aged care market.
What are the opportunities for growth in the markets in which you operate?
I think we have very substantial growth opportunities in both of our key markets. In mining and resources, there are no other companies offering an end-to-end solution of the same breadth and depth by a single supplier. Our end-to-end solution featuring our Swift Access product is a very compelling proposition, and we have already seen a strong take-up with Swift Access attracting some 8,500 screen subscriptions. Whilst this represents impressive growth and Swift undoubtedly is a strong brand in mining and resources, we have only captured circa 7% of this market in 18 months. We believe there’s significant potential for us to grow in this space. The launch of our next generation of Swift Access will serve to increase our competitive advantage and gain market share.
The aged care market opportunity globally is immense. There are some 220,000 aged care beds in Australia, which is forecasted to grow to 300,000 by 2030. Swift Access currently has 2,500 screen subscriptions, exclusively in Australia. In the US and UK, there are more than 2.1m beds combined. We believe the ACE offering is a market-leading, scalable technology that can see Swift grow rapidly into this space and also into retirement living communities.
Why are you so confident you can capture a significant share of these markets?
Our Swift Access product has enjoyed very rapid uptake from our customers, validating the R&D, content investment and structure changes required to remain differentiated as a best-in-class entertainment and communications offering. We are emboldened to continue to invest to remain at the cutting edge in our product development. There’s no reason we can’t continue to build on our recent growth trajectory in the resources market. There are plenty of new mining and resources projects in the pipeline within our key markets so our tendering activity is strong.
It is exactly this philosophy which has been the guiding principle behind the development of the ACE offering. Aged care operators will be able to roll this product out on a mass scale. The next generation of Swift Access and its ACE platform will customise and personalise the experience for residents in aged care and significantly enhance their everyday living experience. To give you an example, imagine starting your day with your TV showing you a slide show of photos sent by your family, your appointments for the day, and your favourite morning news channel or being able to watch a Live stream of the Sunday morning service because you're not quite feeling up to it today. And this experience changed throughout the day based on your changing needs throughout the day. Or from the family's perspective, imagine being able to see a summary care plan or gain access to insights on your loved ones' care. Imagine being able to send them a special gift, like a day out or a special meal, and have it showcased on their TV. It’s a very compelling proposition, and we believe it will be well-received in the market, which, as I’ve mentioned, is large and growing larger into the future.
What do Swift’s current financial look like?
We think that Swift is fundamentally undervalued currently. We are a small executive team and have spent the last two years working on the business internally to ensure that we are appropriately equipped for growth. Now that we feel we have a leading suite of products and a clear growth strategy mapped out, we’re ready to talk more about the upside potential investment in Swift offers.
Put simply, we are a profitable tech business (FY 2023 EBITDA = $1.1m) with a market cap less than half of our FY 2023 revenue (FY 2023 Rev = ~$20m). As a SaaS business, incremental revenue is likely to flow through to a substantially positive profit outcome. I reckon people should look at Swift as a group with repeatable profits and tech company-style growth potential all rolled into one opportunity.
Why is Swift a good investment opportunity right now?
A couple of years ago, Swift set a deliberate strategy to invest in our technology to ensure we were able to offer bespoke entertainment and communications tools to our mining/resources and aged care markets. This direction was led by an ambition to deliver high profit margins from our in-house products.
We are now well on the way to very strong growth in our key markets which we are confident will lead to outstanding profitability and shareholder returns. The undemanding market valuation for a company with repeatable earnings and growth potential represents an excellent opportunity to incoming investors.
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Share Price
Revenue
| 64th | - | Neurizon | $17.59m |
| 65th | - | Resonance Health | $15.75m |
| 66th | - | Aspermont | $15.41m |
| 67th | - | Swift TV | $15.38m |
