Online education provider ReadCloud Limited (ASX: RCL) unleashed its quarterly results for the period ended 31 December 2018, reporting receipts from customers to $149,000 for the quarter. The company stated that its Reseller schools have grown from 50 in Fiscal 2018 to 74 in the current fiscal year, reflecting a 48% increase. Whereas, Direct customer schools have reportedly grown from 20 in FY18 to 38, an increase of 90%.
The news sent the stock price to jump up by 9.01% in mid-day trade before closing at $0.290, up 5.455% on 31 January 2019. Since, its inception in February 2018, RCL stock price has gone up slightly by 1.85%.
In November 2018, the company acquired Australian Institute of Education and Training through which it now provides Vocational Education Courses underpinning the company’s total customer schools’ growth. ReadCloud informed that All of AIET schools have either decided to, or in management’s estimate are likely to use the ReadCloud platform for VET courses in 2019 either as online only or as a supplement to their physical course books in anticipation of going completely digital for 2020.
According to the report, ReadCloud has already signed up VET course publishers to the ReadCloud eBookstore and continues to add VET publishers to its eBook library to offer schools the best selection of course material as well as protecting the content of the publishers.
As at 31st December 2018, ReadCloud had outstanding invoices of $1.6 million owing from direct school customers. The company expects to receive the revenue from customers in current March 2019 quarter. Its cost of sales for the December quarter was $14,000 in relation to sales incurred by the company during September and December quarters. Whereas, Staff costs incurred by the company were $488,000 in December quarter compared to $314,000 in the September quarter.
For 2019, the company intends to focus more on cross-selling the ReadCloud platform deeper into the existing AIET schools. The Direct school segment remains the point of focus for the company. Its management believes that once VET teachers become familiar with the benefits of the ReadCloud platform, the direct sales staff will have a much higher rate of conversion of the entire school to buying digital content through ReadCloud by leveraging the established relationship.
The company informed that the launch of its recent ReadCloud App has been successful which marks a significant move to a “single codebase” for the eReading component of all ReadCloud cross-platform native Apps.
Looking into 2019, ReadCloud’s management presented the optimistic outlook expecting the number of ReadCloud direct schools, reseller schools, and VET schools to grow strongly and organically with the substantial cross-selling opportunities. The management further advised that the company’s focus in 2019 will be on securing additional growth from the new reseller partnerships signed in late 2018, additional reseller partnerships and partnerships with additional VET content publishers.
As at 31st December 2018, the company’s cash balance stood at $2.9 million.
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