Impression Healthcare achieves outstanding sales and revenue growth in fiscal 2017
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
The report was released as the market opened on Monday, and the company’s shares were up 12% in mid-morning trading.
As well as releasing results for the quarter, management also highlighted data for the 12 months to June 30, 2017.
Some key takeaways for fiscal 2017 included 306% growth in sales revenue compared with the previous corresponding period. This was driven by increased unit sales of 420%.
IHL has three marketed dental products, Gameday Mouthguards, ITW (instant teeth whitening) and the recently released Knight Guard (teeth grinding guard).
While 5,239 product units were sold in fiscal 2017, IHL’s distribution platform really didn’t kick into gear until the second half, and it is worth noting that over 5,000 units were sold between January 1, 2017 and July 26, 2017.
This provides a better indication of the run rate that is likely to be achieved in fiscal 2018. Of further significance is the fact that the ITW and Knight Guard products only made sales contributions of eight weeks and two weeks respectively in fiscal 2017 due to the timing of their release.
Given management’s comments that these newer products are delivering stronger margins, the bottom line impact in fiscal 2018 could be significant.
Those considering this stock shouldn’t make assumptions regarding future sales, nor should they base investment decisions on performances to date. Those considering this stock should seek independent financial advice.
Website sales conversion rates above typical e-commerce industry rates
IHL has made substantial progress in terms of establishing relationships with key sporting bodies and individual ambassadors such as Jonathan Thurston and Gary Ablett.
This has paid off in the first half of 2017 with website sales conversion rates for the company’s Gameday product averaging 5.4% between March 1, 2017 and July 27, 2017. This tends to be a peak buying period due to the uptick in contact sport being played during those months.
The conversion rate peaked at 9.9% during that period, well ahead of the average e-commerce sales conversion rate of between 1% and 2%.
Importantly, as the company enters fiscal 2018 with a much improved sales outlook, the scalability of the business has become more apparent with increases in unit sales coinciding with a strong improvement in the company’s return on marketing spend.
Management quantified this trend in saying, “The business is now demonstrating scale, with $4 of sales revenue now being generated from each $1 of marketing spend, compared to just over $1 of revenue for each dollar spent on marketing when the company began its campaign at the start of 2017”.
While this augurs well for fiscal 2018, IHL isn’t resting on its laurels with management commenting on its forward strategy in saying, “With an increasingly active marketing program planned for FY18, the company is strongly positioned to continue its sales momentum with initiatives such as combat gym partnerships and the launch of a series of limited edition Gameday Ambassador Footy Cards as additional value add for customers, as well as AFL and NRL grand final competitions and promotions”.
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.