EN1 more than doubles gross profit and delivers engaging 2019 result
Published 02-MAR-2020 11:35 A.M.
|
2 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
On Friday, engage:BDR (ASX:EN1) released its financial results and business update for the 2019 calendar year.
It was an impressive result with revenue up 50% to $17.1 million and gross profit more than doubling to $9.3 million.
One of the most encouraging aspects of the company’s performance was the significant uptick in margins from 38% in 2018 to 54% in 2019.
With a number of non-cash one-off and/or non-operational factors occurring in 2019, earnings before interest, tax, depreciation and amortisation (EBITDA) is a good indicator of the company’s financial performance.
EBITDA increased from a loss of approximately $6.3 million in 2018 to an operating profit of $1.6 million in 2019.
Management initiated a Strategic Plan to Profitability in February 2019, and the company has delivered on the milestones it committed to at that time, ticking the rest of the boxes indicated below as the second half unfolded in 2019.
Consequently, the strong earnings result has been both a function of a robust operational performance and management’s business acumen in making necessary structural changes.
More specifically, the company was able to reduce staff costs by 43%, while also driving down operating and administrative expenses by 26% during the period.
EN1 enters 2020 with a significantly strengthened balance sheet featuring a positive $10 million turnaround in net assets and a marked increase in cash from $320,000 in 2018 to $1.8 million in 2019.
Foundations laid for growth in 2020
Management’s take on EN1’s 2020 prospects is that the company has never been positioned better for exponential revenue, profitability and market share growth.
Supporting their upbeat view of the company, management pointed to the group’s healthy balance sheet, profitability, scaling revenue and margins, as well as its increased access to significant capital.
More importantly, EN1 has the partnership integrations which differentiate the company from many US peers.
Management expects revenue, gross margins, EBITDA and NPAT to continue to increase in 2020 as a result of the company’s client and partnership mix.
On a year-to-date basis EN1 has generated income equivalent to about 300% of 2019 revenue compared with the previous corresponding period.
In January 2020, EN1 generated about 281% of income compared with the previous corresponding period in January 2019.
February revenues look to have exceeded January 2020, representing nearly 300% of February 2019.
Key focus areas going forward are NetZero publisher boarding, AdCel growth and new integrations for the company’s programmatic ad exchange.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.
