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Quarterly Activities Report and Appendix 4C

by uma

 

ActivePort Group Ltd (“ActivePort” or “the Company”), (ASX:ATV) is pleased to report strong software revenue growth for the quarter, demonstrating the success of the company’s strategy to deliver cash flow from high margin software sales. 

Highlights:

  • Year-to-date revenue stands at $10.27M, a 52% increase from H1 FY22 into Q3 FY22. 
  • Software revenue is now 29.7% of total revenue up from 7.9% in the previous quarter.
  • Contracted software revenue significantly reducing quarterly cash consumption.
  • Gross profit has risen from 32% in Q2 to 62% in Q3, demonstrating the positive impact software sales have on the profitability of the business. 

Overall, the business is executing on its strategy and seeing strong take-up of the core software products. Software revenue is highly profitable and will make a significant cash contribution to the Company’s bottom line in coming quarters.

Group Revenue

Total group revenue is showing strong growth and steadily increasing quarter on quarter. A largeone-off hardware contract in December increased the Q2 revenue above the average but the growth from Q1 to Q3 shows the underlying average revenue growth is accelerating. 

Software Revenue

Pleasingly, software revenue as a percentage of total revenue is accelerating, reaching 29.7% of total sales for the quarter, up from 7.9% in the previous quarter. Software revenue has high gross profit and therefore the $1.08M of software revenue in Q3 made a significant contribution to the company’s cash reserves. 

Capital Consumption

ActivePort executive continues to focus on cost management to maintain a consistent cost base. This is complemented by a positive cash contribution from software sales that should see total cash burn reduce to circa $700K by the end of Q4.

The previously higher quarterly cash expenditure (in Q3) will stabilise due to the growing high margin software sales, and we expect build on this trend into FY23 and be able to demonstrate ongoing revenue growth and positive cash flows.

Note: this table is provided for illustrative purposes and is based on the information available to the company at the time of release. It should not be used as a guarantee of future performance or forecast.

Q4 Objectives

Increased focus on enterprise software sales to the telecommunications sector,building on the success of the Company’s software sales in Q3.

Continue to work with MSP and ISP partners globally to grow the SD-WAN licence revenue base with their enterprise customers.

Launch the Global Edge platform and deliver aself-service, edge-to-cloud, SD-WAN orchestration portal.

CEO and MD Karim Nejaim said:

“Quarter 2 and Quarter 3 have been foundational for ActivePort, and we are very proud that the revenue from our software products is now being realised as planned. We have a strong pipeline of customers both local and international and an increasing number of strategic deals that will make a strong positive cash contributionto the Company heading into FY23.”

IPO Use of funds reconciliation

Pursuant to Listing Rule 4.7C2, the Company confirms that during the period since listing on the ASX on 20th October 2021, its expenditure incurred is in line with the Use of Funds as set out in its Prospectus, with a summary as shown in the table below:

Use of Funds under Prospectus1 Funds allocated under the Prospectus Funds expended to 31 March 2022
Business growth and acquisitions 1,700,000 1,067,000
Global sales development  4,200,000 2,298,000
Product engineering and tech support 2,400,000 1,936,000
Capital raising and listing costs 870,000 837,000
Administration and other corporate costs 375,000 329,000
Working capital 2,595,000 874,000
12,140,000 7,341,000

Note 1 – refer to the ActivePort Prospectus dated 13 August 2021 for full details.

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