The Coronavirus pandemic has had a massive impact on the UK economy. A contraction of more than 20 per cent in the three months to June culminated in the announcement today means that we are now officially in a recession.
However, while equities as a whole have taken a hit, and most sectors lost out initially, there are winners, with some of them left in a better position than they were pre-Covid.
The Tech Gold Rush
Notable examples of these are tech stocks, and all things digital /online, and of course the pharma area – boosted by hopes of a vaccine. Of course, as is usually the case, one cannot buy into the tech Gold Rush in an arbitrary way. This is especially so given how many have rallied hard. The key is to look at companies on a case by case basis.
Dev Clever, a developer of software for educational and commercial applications, has seen its shares triple since March, so the market is clearly keen on its offering.
This is led by career guidance platforms Victar VR and Launchyourcareer.com. But the latest highlight in terms of the company’s progress is the combined potential of Veative Labs and Dev Clever, something which should be factored in alongside the Lenovo / Dev Clever partnership which has clearly inspired investors in recent months.
The kicker as far as the Veative relationship is concerned is that it is a leading provider of online and immersive learning modules within the EdTech sector. What is the big deal for Dev with this relationship? In the simplest terms it can be the equivalent of having your company’s app as the default app on an iPhone or Android phone – you have a captive audience and in-built momentum in terms of engagement and sales from the start.
Lenovo In The US And Canada
Even more beneficial is that as well as being embedded with a market leader – sales and marketing is in Lenovo’s hands, Dev Clever can focus on developing its next killer (market-leading?) product. Indeed, the arrangement and smartness of engaging in symbiotic relationships with market leaders in their ecosystem speaks for itself, both with Veative and Lenovo, a giant in hardware. Its massive presence in schools, businesses and beyond mean once again that Dev can (collaborate) with established players – something which offers scalability and efficiencies. Indeed, Lenovo is leading the charge for Dev Clever in the US and Canada this year.
Margins Towards 90%
Perhaps the best aspect of partnerships with leading international players is that margins are improved, as the partners do the initial heavy lifting in terms of activating new territories. This is highlighted by the way that margins are forecast to rise from an already massive 67% this year, up to nearly 90% in 2023.
When you add into the picture the way that Dev operates a SaaS model for its products, something which offers visibility on earnings, we are looking at a bright scenario. This scenario is made brighter still, when one keeps in mind that a large proportion of the business it will be doing will be in the public sector – the assumption here is that once on board we will be looking at recurring revenue that keeps on doing just that. The public sector has also to be regarded as far better financially underpinned than the private space, until we emerge from the pandemic.
Remote Technology Infrastructure
All of this leaves us with how to anticipate Dev Clever’s position in a Covid-19 affected world? In a contactless / distance-learning based world, many tasks have to carried out virtually whereas before it could be seen as an indulgence. Remote e-learning, career exploration, and professional development are set to become the norm, especially if we go into a “one week off, one week off” school regime, or staggered working hours and flexible office days. Even if a return to pre-Covid days is seen, all the remote technology infrastructure will still be required.
As we have seen in many aspects of life so far this year, temporary changes have in many cases become irreversible. Dev Clever’s timing has been close to perfection, and as we are aware, with the stock market, timing is everything.