Universal PropTech – Consolidating the booming North American PropTech sector with rapid expansion
When it first announced its new strategic approach last year, Universal PropTech (CVE:UPI) had one chief goal in mind:
You see, with a strong portfolio of legacy customers on board—including major marquee contracts with the likes of Toronto City Airport and the Canadian Government itself—the company already had a solid foundation on which to build with strong revenues to boot.
But given the PropTech industry is now booming, with conservative estimates suggesting it’s already worth around $7 billion…
And with demand for more environmentally clean and ‘healthy’ buildings increasing rapidly with every passing day as the world fights to keep the Covid-19 pandemic in check…
This group’s management team quickly identified an opportunity to pounce and become a real leader in a market where it already has a decades-long legacy.
Well, Universal PropTech has set out to make the most of its wholly-owned subsidiary, VCI Controls—which provides state-of-the-art heating, ventilation and air conditioning services that make buildings smarter, healthier, and cheaper.
Specifically, it’s leveraging VCI’s existing brand, legacy, and customer base, and using it to bring onboard even more advanced technology and offer it a route to market.
The plan is for this to then improve VCI’s offering to both new and existing clients, and—ultimately—add multiples of revenues to Universal PropTech’s bottom line.
There’s no question about it…
Universal PropTech has put in place ambitious plans in a rapidly-growing market that could make early investors massive returns on their investment.
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So, it has been particularly exciting to see the group post a series of key developments over the last few weeks demonstrating that it is well on its way to achieving its goals.
First, it announced a new deal with distribution partner Sustainable Tech that will see its new indoor air conditioning system—Air Sniper—reach a massive network of 2,400 dealers across Canada.
Then, it revealed the receipt of four new VCI purchase orders to the value of three quarters of a million dollars, including one worth half a million dollars running for at least three years.
And most recently, the group unveiled yet another distribution agreement for Air Sniper that will roll out its products to a marketplace of more than 3,000 potential customers across the US.
Whichever way you look at it, these developments are not only clear evidence of Universal PropTech’s intent…
But, also, of its ability to broker the deals and partnerships needed to become a dominant industry force.
Rolling Air Sniper out across North America
Having toured the Air Sniper factory in Calgary, Sustainable Tech’s president—Chris Mitchell—pointed out how excited he is to have signed a distribution agreement with Universal PropTech and how keen he is to see the technology distributed among the 2,400-dealer network his company has built.
Based in Alberta, Sustainable Tech deploys three independent sales representatives across Canada, who each link up with a strong network of sustainable energy, electrical, and mechanical dealers.
It also has a sustainable energy consultation arm that will surely help to raise awareness of the advanced technology Universal PropTech is developing and producing for the industry.
Frankly, the sales and revenue that could be generated from this deal stand to be huge, and will without doubt be a serious addition to the already strong and significant revenue the group already generates.
Indeed, it’s worth remembering that Universal PropTech has made more than $10 million annually on average for the last four years from its legacy contracts alone.
So, it was extremely encouraging to see the firm quicklyfollow the Sustainable Tech deal with yet anotherAir Sniper agreement that could offer tremendous upside value.
At the beginning of July, the company revealed that Alps Controls will begin to distribute the subsidiary’s indoor air quality products to its online marketplace of more than 3,000 customers.
Once again, that’s a lot of potential clients.
But the critical significance here is that Alps Controls operates in America.
And with the US market for indoor air quality solutions on track to grow from $9.6 billion in 2018 to $12.2 billion by 2023…
Opening the door for Air Sniper products to the entire US market stands to be extremely accretive to Universal PropTech’s bottom line.
Experts in long-term marquee clients
Based on what we’ve already seen, Universal PropTech’s revenues only look set to grow.
But this direction of travel by no means stops at Air Sniper at all.
Indeed, the group’s progress was once again evidenced by the news last month that VCI has received approximately $750,000 of purchase orders for mechanical projects and services.
Understandably, one element of its business Universal PropTech is keen to keep is its ability to build long-term relationships with marquee clients.
And that certainly looks to be happening in light of this news.
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In fact, one of the orders—with a large municipal housing player—is to the tune of $500,000 and looks to run for at least three years, with the scope for extensions.
On top of that, Universal PropTech has also secured a two-year, $150,000 contract with a large Ontario municipality for mechanical services and repair work, a $50,000 contract with another large Ontario municipality for heat pump installations, and a $50,000 contract with regional police services for heating, ventilation and air conditioning services.
All four purchase orders just go to show the large demand for the exact services Universal PropTech is offering.
And, with more and more firms and organizations now trying to figure out how to make their buildings safer for people to return to work after the coronavirus pandemic, the demand for Universal PropTech’s services is only going to increase.
Most importantly, the firm is very much prepared for this.
Indeed, in another recent update, its expected developments for the second half included:
Expanded healthy building capabilities;
New acquisition opportunities, partnerships, and deals; and
Further distribution capabilities across Canada and into the US.
Taking a leading PropTech position
Those who have already clocked the rising demand for healthy buildings—and have seen that both the PropTech and Covid-19 diagnostics industries are growing at pace—will realize the significance of these recent announcements.
What they show more than anything is that Universal PropTech is a company that is very much doing what it said it would, and is clearly on track to become a major player in the industry.
And, while the group manages to further cement its success on a relatively ‘low-key’ basis, it seems that—at least for now—smart investors still have a chance to get in on the action at what could be a huge discount.
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