Under the agreement, the company and its affiliates will be able to access NEC's media and communications platforms at discounted rates.
"This agreement represents a major strategic advantage for the YBR Group's intentions to build a leading non-bank financial services group," executive chairman Mark Bouris said.
"Nine Entertainment Co has been an outstanding partner and supportive shareholder YBR since its listing and the leverage it generates for our marketing activities through its leading media platforms is second-to-none.
"The new arrangements will greatly assist the YBR Group to execute its strategy by building brands and generating leads into those brands across their portfolio."
Nine has a stake in Yellow Brick Road.
The NEC platforms included in the agreement are:
- The national Nine Network free-to-air television stations Channel 9, Go! and Gem! In the major capital cities of Sydney, Melbourne, Brisbane, Adelaide, Perth and Darwin;
- The regional NBN free-to-air television station in Newcastle, which also services the New South Wales Central Coast, North Coast, Northern Tablelands and the Queensland Gold Coast; and
- The websites and electronic direct marketing platforms of Ticketek and ninemsn.
Some of the company's affiliates - including accredited licensees, franchisees, brokers and distributors - will also be able to access these arrangements subject to restrictions.
In return for the discounted rates, Yellow Brick Road has agreed to place certain minimum amounts and percentages of its advertising expenditure over the relevant periods with the NEC platforms.
The new arrangements are subject to certain conditions precedent, including the completion of the acquisition of Vow, and do not impact and are independent of the existing contra advertising arrangements the YBR Group has with NEC, of which YBR still has circa $4.2 million in pre-paid advertising to spend.
Yellow Brick Road's 5-year strategic marketing agreement with Nine Entertainment Co. at discounted rates is a key plank to build brand awareness and increase revenues through campaigns via a national television network, as well as from a major online portal website and direct marketing platform.
These are new arrangements in addition to the existing contra advertising with Nine of which there is still $4.2 million in pre-paid advertising spend available.
It will propel YBR further down the road as a leading non-bank financial services group. In addition, it provides further confidence that the company is on track to become profitable in FY2015.
As well as lending further credence as one of our top industrial stocks for 2014/15.
Proactive Investors recently initiated coverage on YBR and provided guidance and share price target of $0.73 to $0.97.
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