ReadCloud Ltd Announces Quarterly Report, 257 Schools Onboard ReadCloud Platform

  • Apr 30, 2019 AEST
  • Team Kalkine
ReadCloud Ltd Announces Quarterly Report, 257 Schools Onboard ReadCloud Platform

ReadCloud Limited (ASX: RCL) is an Australia-based education technology company which aims at providing eBooks on its online learning platform to users.

ReadCloud Limited announced its quarterly update and quarterly cash flow statement for the quarter ending March 2019. Following are the major highlights from the report:

Operational Updates:

The company experienced an outstanding period for school onboarding as was announced to the ASX on 1 April 2019 with a tremendous increase of 267% from 70 schools in FY18 to 257 schools. Further, 43 direct school customers use ReadCloud in 2019 (which is a 115% increase in schools from 20 in FY18). 74 Reseller school customers use ReadCloud (a 48% increase in schools from 50 in FY18); and 140 school customers use ReadCloud for delivering Vocational Education and Training (VET) courses, depicting a 54% increase from 91 in FY18 in the number of schools serviced by ReadCloud subsidiary Australian Institute of Education & Training (AIET). ReadCloud is also actively displayed at the state and national school and education industry conferences.

Finance Updates:

ReadCloud received $1.55 million from customers this quarter ending March 2019, which is an increase of 131% from the March 2018 quarter. The company billed and received a major portion of its reseller revenue, inclusive of its share of margins on eBook sales to reseller school customers. Furthermore, the cost of sales/payments to publishers for the quarter were $1.18 million. Cost of sales for the June quarter is expected to be circa $350,000. The staff cost for the quarter was $520,000, a significant increment from $488,000 for the December quarter. Lastly, the administrative and corporate costs were at $147,000, showing a dip against the $231,000 for the December quarter.

On the growth Strategy and Outlook front, ReadCloud is committed to focus on capitalising its sales pipeline for 2020. The company proceeds with the expansion of usage of the ReadCloud platform to additional year levels within the existing direct customer schools while seeking viable opportunities to VET schools. Given the recent partnerships signed in 2018 including Adelaide Direct Stationers, Bennetts Office Supplies in NSW, Blue Ink Education in the Australian Capital Territory and the most recent with Central Queensland, growth prospects continue to soar, especially in the VET School sector. ReadCloud recorded revenue for the half-year to 31 December 2018 of $2.33 million, a 97% increase when compared to the prior period. Management anticipates that 2H19 revenue will exceed 1H19 revenue.

On the Cash flow front, the company reported a net cash outflow of A$503k in operating activities, a total of A$5k was used in investing activities and the cash and cash equivalents at the end of the quarter were at A$2,409k. Finally, the total estimated cash outflows for the next quarter is A$1,177.

The company on 8 April 2019 had entered into a 3-year Strategic distribution Agreement with the Australian Training products. ATP has committed to using ReadCloud as its digital content encryption and eReading delivery platform for its customer base, which is estimated to be a great growth prospect in the coming quarters.

Share Price Information:

The RCL shares were last trading at A$0.315 on ASX (As of 29 April 2019). The company’s market capitalisation stands at A$27.64 million, and the ASX reported Earnings Per Share is -0.011 AUD.


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