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11. Bull, Bear & Beyond – Cordel Group: executive interview
6 Plays1 year ago
Cordel Group’s CEO John Davis highlights the factors behind the company’s recent commercial success, including new client wins in North and Latin America, the Middle East and the Asia-Pacific region. He also addresses balancing business development with managing an expanding customer base and explains why opportunities to cross-sell additional modules are now opening up. Finally, he outlines financial expectations now that Cordel has established a solid growth platform.
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About ‘Bull, Bear & Beyond’
'Bull, Bear & Beyond': features candid conversations with senior executives and from our own team of experts from across industries, exploring strategy, innovation, and the opportunities shaping their markets and 60-second pieces are a compressed summary of content designed to convey our message in a single, easily shareable hit.
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Original interview published on 21/10/2024 and reposted as a podcast
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Transcript
Introduction to Cordell and AI in Railway Maintenance
00:00:07
Speaker
Hello, today I'm joined by John Davis, Chief Executive Officer of Cordell. Cordell are a UK-listed technology company focused on the rail industry. The company's core technology uses AI to automate the inspection and maintenance of transport corors corridors, namely railway tracks.
00:00:26
Speaker
John, many thanks for joining me today. Pleasure. um So it's been a while since we last caught up, but it's been a you know pretty six successful six months or so.
Achievements in Contracts and Approvals
00:00:36
Speaker
um Can you just summarise the last six months and and the momentum you've had over but over the recent times?
00:00:42
Speaker
Yeah, sure. Well, thanks for having us, firstly. And and secondly, I think we feel like we've made really great progress across three core areas. Firstly, in our commercial customer side, we've won a range of new contracts. So we've been able to talk about Genesee and Wyoming, a U.S. Tier 2 railroad, which has a lot of companies across the U.S. and gives us a lot of opportunity for the future.
00:01:06
Speaker
Secondly, we've built out the relationship we have with TrendMire down in Mexico, which again feels like a really significant multi-year future opportunity for us. And we've also announced contracts in APAC with a company there and with the in the Middle East, both new regions for us over the course of the last six months.
00:01:28
Speaker
As well as that, I think we've made real progress in our products, so in the company itself, ah in terms of the technology readiness levels of the various propositions we have, and indeed in how we deliver those propositions to the customer.
00:01:42
Speaker
And finally, I think we've also made some progress on the credibility that we bring to the market. So with the approvals that we've had from Network Rail here in the UK, that's another endorsement of what Cordell is bringing to the rail industry.
00:01:56
Speaker
Great. So so progress across across the globe, Middle East, Americas, Europe, UK.
Success Factors and US Market Reputation
00:02:03
Speaker
um What specifically has been the catalyst for this? What's helping you to win this business?
00:02:08
Speaker
So I think, again, i I talk about three things that the company has been able to do very successfully over the course of the last 12 months. The first is I think we've built out the team in a really effective way.
00:02:21
Speaker
So starting in the US, I think we have a great VP of sales there, a guy called Tim Francis, who's brought a lot to us in terms of the network he has, his experience with the industry.
00:02:32
Speaker
But also then if we look into our Australian team, where we have the bulk of our engineers and our delivery capability, we have some really excellent folks there who are really driving the business to the next level.
00:02:45
Speaker
We're using that as well to enhance our business development efforts. So right now our CTO, Aaron Hoy, is over in the States. He'll be there for a couple of weeks seeing customers and potential customers.
00:02:58
Speaker
I think also our proposition has really matured in the last 12 months as as our products have become better fit for the market, really clear in terms of what we can do in vegetation management, in ballast management, in overhead line, in clearances and increasingly in level crossings. and And that I think has given us a really clear proposition that we can talk to customers about.
00:03:23
Speaker
And finally, I think our our reputation is is being enhanced, both by the approvals that I talked about earlier, but also I think as Tim in the States talks to more and more customers, I think there's a real sense that Cordell has something really exciting to bring to the market.
Balancing Growth and R&D for Future Success
00:03:38
Speaker
And what are your sort of key priorities over course of the next 12 months? you You're a relatively small team and you've won a lot of business. how How are you going to balance executing on your existing customers with R&D and further business development and so on?
00:03:52
Speaker
Yeah, I think it's a great question and it's definitely something that that I think about a lot. i think The progress we've made in our delivery capability has been really critical in in building the foundation for how we can deliver for these new customers we have and how we can continue to focus on trying to win more.
00:04:10
Speaker
So for this year, we're really focused again on trying to maintain that sort of roughly 40% revenue growth, but ideally to do that and break even into the bargain. Now that is prior to the recent investment we took, which we'll talk about a little bit later.
00:04:24
Speaker
But that profitable growth, getting to somewhere in the six to six and a half million of revenue for this year is what we're we're really focused on for FY25.
Fundraising and Technological Advancements
00:04:35
Speaker
Interesting. And um in terms of R&D, you've recently raised one million pounds to accelerate development of some of your technologies. Can you can you discuss that? Yeah, sure. So um we did a Rathbones-led investment of a million pounds, ah which has given us a really exciting opportunity to invest quicker in the 3D object recognition that we've made some recent progress in
00:05:00
Speaker
and ah As I've mentioned, we're looking to break even aside from that. but But with that investment, we'll be able to to get some extra resources, both in the technology team, in the AI capability and in the frontline in terms of talking about those services, particularly in the US market.
00:05:19
Speaker
And it's really focused on a piece of regulation in the US called Positive Train Control, PTC. And it's something that we believe we've now got the capabilities to go ahead and build out a proposition.
00:05:32
Speaker
Our aim is to have that ready for the second half of calendar year 25. So effectively, as we go into our FY26. Great.
Revenue Growth Plans and Future Targets
00:05:41
Speaker
And then now turning towards the financial perspective, you've you've laid a nice platform with all of these new customer wins. What should we be be expecting financially from Cordell over the course of the next 12, 24 months?
00:05:54
Speaker
Yes, so this year, Cavendish have us slated to make a 6.2 million revenue. It'll be at a small loss based on the investment we're making in this 3D object recognition technology.
00:06:07
Speaker
um But after that, we think we can maintain that 30% to 40% revenue growth over time. Really, I guess, targeting to get to around £10 million pounds of revenue by somewhere around FY27, FY28,
00:06:22
Speaker
In our market we really don't need hundreds of customers. If we've got somewhere around 20 customers by FY27, FY28, maybe five of those similar to the sort of deals we have with an Amtrak today, which might be worth the better part of a million pounds to us each year, we can really see our way to build out a business that that gets to 10 million pounds of revenue relatively quickly.
00:06:45
Speaker
And that actually doesn't even take into account the opportunities we see in the PTC world, which we think are additive to that. So we see a lot to be really optimistic about into the future.
Expanding Service Offerings and Market Opportunities
00:06:56
Speaker
And now turning towards the use cases, one of the very interesting things about your technology has always been the range of use cases that you can apply it to. Can you talk about how that's panning out for you? Yeah, sure. So what's been interesting about our business is we've tended to win customers based on one use case only. So Amtrak is a classic example, a six and a half year contract, $6.7 million ah dollars of revenue, but only servicing clearances for Amtrak. So we always see an opportunity to broaden that in the future to offer them things like vegetation, ballast, overhead line, all of these other modules that we have to offer.
00:07:34
Speaker
And I think I would say that that those modules are maturing really, really interestingly for Cordell. We launched our website at cordell.ai recently and we feel like we've done a ah nice job of defining not only the the platform that we have, the repository for all the data, which we call Cordell Connect, but also those modules that build on top of that platform.
00:07:57
Speaker
And I think where we see that going in the future is some opportunities for us around building out the level crossings proposition that we've made some work, made some progress on in Australia, but also focusing on this PTC world in the US, which is another piece of asset identification, which is a step forward for our platform.
00:08:17
Speaker
Great to hear things going so well. John, many thanks for joining me today. Great pleasure. Thanks, Dan.