1st Group Limited (ASX: 1ST) made an announcement of its quarterly update for the quarter ended 30 September 2018. The revenue presented remains unaudited. The managing director and the Co-Founder of the company Klaus Bartusch reveals the quarter one results to be disappointing. However, there is a record level of activations in the quarter of signed contracts which is expected will be a step ahead in increasing the revenue in Q2. The other cause of low revenue in Q1 was impacted by the lower advertising revenue generated. However, for this quarter the company has its pipeline much healthier. The company has already prepared in initial ACV guidance for 1H FY19 which is already affirmed and is on track. There was an increase in revenue by 11% as compared to the Revenue for prior year corresponding quarter and 3% lower than Q4 FY2018. The subscription revenue growth for the current quarter was 21% on the prior corresponding period. The contracts which signed in Q1 is being activated and the new contracts signed is expected to generate revenue in Q2. This activation in Q2 will also generate revenues in Q3. The platform which the company provides to its customers to increase the literacy in regard to the patients’ health and ways to improve their health forms a source of revenue from advertising. After the successful promotion of the contact lenses in Q2 FY2018, the company is continuously working to build maturing channel for new advertising opportunities that can be leveraged by its customers. The company reported a slight fall in the fee revenues on the prior quarter and prior year corresponding quarter.
There was an increase in the annual expected revenue from contracted customers for subscribing products which includes Online bookings, EasyFeedback and EasyCheck-in Kiosks (excluding setup, usage and advertising revenues) by $4.6 million at the end of Q1 FY2019 representing an increase of 36% from Q1 FY18. This was due to the increase in the total number of sites which got increased by 43% from Q1 FY2018.Still there are new sites which has been added and it is expected that it will be generating revenues for Q2. There is a steady growth in the site as well as the customer acquisition which has made 1st Group leader in the market share in Pharmacy, Optometry and Vet/Pet services. The site acquisitions form a platform for the cross-sell opportunities which is driving significant additional value from its customers. The customer retention rate has improved from 91% to 92% based on 12 months average calculation rate indicating high customer satisfaction and loyalty from its subscription product and services.
As a result of activities related to reduced costs, careful management of supplier payments and tight control of receivables collection, there was a reduction in Cash burn for the quarter by 47%.