A provider of digital education content to the education sector, Readcloud‘s (ASX:RCL) latest quarterly results have been well received by the market.
The business has reported continued strong growth in both customers and contracted revenues, with Q1 sales increasing to $0.44 million. Cash receipts from customers improved 38% from the previous corresponding period and, combined with proceeds from a recent capital raise, Readcloud now has around $3.4 million in cash on hand (and is expecting a $0.39 R&D tax refund in the current quarter)
With the business losing over $0.42 million in operating profit (EBITDA) last year, and burning through $1.1 million in operating cash in the latest quarter, it will need to sustain strong growth sustained in order to reach breakeven anytime soon. Investors should, however, be mindful that the first quarter is typically the slowest for Readcloud due to the spending cycles of schools. The 2nd and 3rd quarters tend to do most of the heavy lifting.
The company said it had secured new customers across all four of its sales channels and it also announced a strategic distribution agreement with an established vocational education & training provider, Training Resource Solutions. Meanwhile, the team has recently finished development of a new media overlay feature, which is hoped to further boost the attractiveness of the offering.
Readcloud didn’t provide specific guidance, saying only that it was well positioned “for strong growth going into the 2020 school year”. Based on last year’s financials, shares are trading at roughly 7 times sales, but nevertheless remain below the Strawman community consensus valuation.
Ranked #50 on Strawman, you can visit the company report below to learn more.
Strawman is Australia’s premier online investment club. Join for free to access independent & actionable recommendations from proven private investors.
Disclaimer– The author may hold positions in the stocks mentioned in this publication, at the time of writing. The information contained in the publication and the links shared are general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. For errors that warrant correction please contact the editor at admin@strawman.com.
This Service provides general financial advice only, and has not taken your personal circumstances into account. Strawman Pty Ltd operates under AFSL 501223 . For more information please see our Terms of use. Please remember that share market investments can go up and down and that past performance is not necessarily indicative of future returns. Strawman Pty Ltd does not guarantee the performance of, or returns on any investment.
© 2019 Strawman Pty Ltd. All rights reserved.
| Privacy Policy | Terms of Service | Financial Services Guide |
ACN: 610 908 211 | Australian Financial Services Licence (AFSL): 501223
