Message from Managing Director
Much has been achieved in the first full financial year for The Yield. We have outperformed against the targets we set ourselves on revenue, costs and capital raising. We are in strong shape.
Underpinning this success has been the recruitment of a talented team of staff and core consultants. We now have 12 staff with 6 based in Tasmanian and our engineering team based in Sydney.
I am particularly proud of the diversity in our team. Nearly two-thirds of our staff are women (across both technical and non-technical roles), we were born in 8 countries and speak 9 languages. Recognising our efforts, the Australian Information Industry Association (AIIA) has award The Yield its inaugural #DiversityTech award for business. This will be announced in late July.
Whilst there is much to be proud of there is still much to be done. FY17 will be a very big year. We will be delivering our oysters solution to customers at scale. This will test our execution capability. We will launch our agriculture solutions – initially using public weather data as a way of acquiring customers and building our sales pipeline for our on-farm microclimate sensing system. We will finish the design of our microclimate sensing system and prepare for its manufacture including meeting our regulatory requirements.
It is likely that The Yield will need to complete an additional capital raising round. The timing and quantum will depend on how successful we are in accessing government funding.
It will be critical that we deliver a reliable system with our oyster solution. Our subscription model means that if we don’t produce a reliable service we don’t get paid. Just as importantly our reputation will be built on the reliability of our first system.
The technology risks are significant given the innovation in our hardware, software and analytics platforms. Pulling this all together is part of our competitive advantage but also has inherent risks. I am confident we have the team and systems in place to manage our risks and to deliver great business outcomes.
Finally, in this financial year we will be testing the market with our agriculture solutions and creating a pipeline of presales contracts. This will be a critical test of the strength of our business model.
A key metric for investors is how The Yield has performed against our business plan in our Information Memorandum from October 2015. In FY16 highlights are:
· Achieved $363,800 in revenue exceeding our targets by 42%
· Kept our costs on budget
· Raised $3.395m in private investment and lifted the share price from $1 to $3.17
· Won a prestigious Accelerating Commercialisation grant of nearly $1 million
· Lodged a patent application for our oyster solution technology
· Opened offices in Hobart and Sydney
· Executed the development and manufacturing contract for our Microclimate Sensing System (MCSS) development with Robert Bosch Australia
· Completed a global licensing deal with Bosch for our microclimate sensing system hardware.
In terms of leading indicators for FY17 we have a sales pipeline of just over $2 million and have signed contracts worth $450,000. This is slightly over 50% of the target set in October 2015. Our sales target for this financial years is $914,000.
Following Robert Bosch’s investment in The Yield, Gavin Smith has joined our Board. Gavin has been President of Robert Bosch Australia with Responsibility for Oceania (Australia and New Zealand) since 2011. He joined Bosch in 1990. He has held senior roles in the company including as Regional President of Chassis Systems Control and other automotive original equipment roles in Australia and Germany.
Gavin is an experienced director. He is a non-executive Director of FMP (Bosch-Honeywell JV), Stillwell Motor Group and the German-Australian Chamber of Industry and Commerce (AHK).
Gavin holds a Bachelor of Commerce from University of Otago (New Zealand) and MBA from Monash University, Melbourne.
Dr Mike Briers, Director of The Yield, has been awarded an Officer of the Order of Australia (AO) for distinguished service to the digital and finance sectors. Mike brings enormous commercial experience in digital technology and big data to The Yield’s board.
340 Oyster Growers using The Yield’s technology
The Yield has a contract to roll-out our solution across 14 sites in Tasmania, covering about 80% of the value of production. This has been achieved with the support of Microsoft who has provided funding through its strategic project fund. The project is designed to demonstrate the business case at scale. The sensor stations will be rolled out over August and September.
The NSW and Tasmanian food safety authorities have also agreed to use our software solution to manage opening and closing. The solution is currently being coded and will be rolled out in September.
This means we will have over 340 oyster growers using our technology on a daily basis from September, 2016 as well as two state Food Authorities.
MCSS contract takes business to next stage
The Yield has executed our microclimate sensing system (MCSS) contract with Robert Bosch Australia. This a significant milestone for the business. The Yield owns the IP in the system. The contract gives The Yield a fixed price for development and manufacture, and a Bosch-backed warranty. These are critical for managing our technology risk.
The Yield has also secured a global licensing deal with Bosch for the MCSS. The license does not include our software, data analytics or apps. It is a non-exclusive global license but excludes agriculture and food industries in Australia and NZ. Bosch will pay The Yield a 30% license fee on each sale. This gives The Yield potential revenue and brand presence while we develop our agriculture solutions in Australia. The license is limited to five years.
Australia’s leading Horticulture industry body buys irrigation solution
HIA is the industry Research and Development Corporation (RDC) for horticulture. It is funded by membership levies which are matched by the federal government. HIA spends nearly $100 million in R&D each year. HIA represents The Yield’s target market of intensive irrigated perennial crops (such as fruit trees) and annual crops such as vegetables.
HIA has contracted The Yield to develop an irrigation solution for its vegetable growers in four crops – carrots, brassicas, lettuce, and leafy vegetables. This is great way for The Yield to develop its agriculture solutions, to access off-balance sheet R&D capability and to get access to market.
Our Ag Solution Road Map
We are working to a clear road map for our agriculture solution development. The app development and microclimate sensing systems development will come together for in-field trials from January 2017 preparing for being in market in FY18.
The Yield builds its IP pipeline through Oyster Research Initiative
The Yield is a technology and commercialisation partner for a $3 million federally-funded Cooperative Research Centre Project (CRC-P) called Future Oysters. Part of the project is focusing on developing disease prediction models based on environmental factors. The Yield will provide its data services in return for the right to commercialise the algorithms in our decisions support solutions. The key diseases that the project will be looking at are Pacific Oysters Mortality Syndrome (POMS), Winter Mortality and QX-virus in Sydney Rock Oysters and Pacific Oysters. POMS has the most applicability globally.
The Yield Wins Diversity in Tech Award
The Australian Information Industry Association (AIIA) has awarded The Yield its inaugural Diversity in Technology award in the business category. This is a fantastic achievement.
Diversity and inclusion are core values for the business. The Yield had a focused effort to recruit a diverse team. The result is that 67% of staff are women, we come from 8 countries and speak 9 languages.
The Yield has developed a short animation for use in future recruitment. Watch Now .