A big contract win has highlighted the e-commerce capabilities of mdf Commerce (mdf Commerce Stock Quote, Chart, News TSX:MDF), says analyst Nick Agostino of Laurentian Bank Securities. Agostino issued an update to the clients on Monday where reasserted his “Buy” rating and raised his target price from $11.50 to $13.25 on MDF’s gaining sales momentum. The stock was also included on a list of “Preferred Picks” for 2021 from the firm.
Mdf Commerce, a Montreal-based operator of e-business networks and provider of e-commerce solutions, announced on Monday an agreement with Aldi UK, the United Kingdom’s fifth largest grocer and a subsidiary of German-based global supermarket chain Aldi. The agreement will see the implementation of MDF’s omni-channel Orckestra solution through Aldi UK’s Click & Collect contactless shopping and curbside collection, which the company is currently expanding to over 200 stores (Aldi has 1,030 locations in the UK and Ireland).
“To have been chosen by Aldi UK to assist them in the launch of this very successful service is not just an honour, but also a proof of our unique capabilities to support timely and strategic omni-channel commerce initiatives through one comprehensive solution for our clients,” said mdf president of e-commerce, Louis Mousseau, in a press release. “Our thanks go to the entire team that has contributed to this initiative and make it possible for shoppers in the UK to plan and celebrate the Holidays as easily as possible before 2020 comes to an end.”
MDF’s share price, already up substantially in 2020, climbed another 38 per cent in trading over Monday and Tuesday. On the new announcement — which was first referred to by MDF in March of this year but only now made formal — Agostino said MDF had signed with Aldi following an initial meeting at a trade show in New York and a 20-store pilot over the summer that proved to be a successful audition.
“Although MDF competed against other large e-commerce solutions, it particularly stood out by virtue of its headless technology stack that seamlessly integrated with Aldi’s in-house POS and SAP-based ERP systems, and ability to be rolled out as a centralized solution with store- level customization. MDF was able to reach its pre-Christmas goal with the assistance of its partner network, but faces challenges in recruiting and training personnel remotely to aid with deployment,” Agostino wrote.
Agostino noted Aldi’s heft, with over 10,000 stores in 40 countries and a combined revenue of about US$80 billion and a strong presence in key markets such as the US, the UK, China, Australia, Germany and Italy. According to Agostino, MDF is hopeful of expanding its business to other regions for Aldi, while at the same time the company has indicated that it’s in discussions with other international grocers.
“Once fully rolled out, MDF estimates a multi-million dollar contract, with a fee structure based on number of orders on the platform and a base subscription. However, the contract is not expected to lead to customer concentration (less than ten per cent of total revenue), implying
Nick WaddellCantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.