Simble grows SimbleSense and makes sustainable cost cuts
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
Shares in Simble Solutions Limited (ASX:SIS) opened 10% higher on Monday morning after the company released an impressive June quarter report and management provided a promising business update.
Simble is an Australian software company focused on energy management, mobility and Internet of Things (IoT) solutions.
The Simble Energy Platform or ‘SimbleSense’ is an integrated hardware and real-time software solution that enables businesses to visualise, control and monetise their energy systems.
Over the three-month period to June 2020, the number of meters under management on the SimbleSense platform increased by 4.2%, resulting in annual growth of 37% since June 2019.
The growth rate of meters under management is expected to accelerate through the September quarter as a result of recently signed contracts with Sylvania Lighting and Bluewater Shopping Centre in the UK, as well as recent wins in Australia driven by the NSW and Federal Government energy efficiency grants.
Recurring revenue looking robust
This is an important area of the business for the company as it generates recurring revenue, providing predictability of income as opposed to the lumpy earnings that can come with one-off contracts.
As indicated in the following graph, annualised recurring earnings have stayed above the $500,000 mark for the last 12 months, and over the last six months and they have increased by nearly 20% during that period, pushing above $600,000 in May.
During the quarter Simble continued to on-board customer sites and meters under management to its energy data analytics platform, with each installation delivering recurring Software-as-a Service (SaaS) revenue which is recognised on a pro-rata basis over the life of the contract.
Orders of the Simble Energy platform also include hardware components, which are recognised on an upfront basis.
From a broader perspective, the company’s cash burn profile has improved dramatically over the last 12 months and management expects to consolidate and maintain the reduced cost base.
Gross cash outflows from operating and investing activities (excluding non-recurring costs) declined year on year to $780,000, a 39% improvement on June quarter 2019.
Whilst this measure was slightly higher than the March quarter due to variable cost of sales on June quarter mobility revenues, operating and investing overheads (gross cash outflows excluding cost of sales and non-recurring costs) have continued to reduce for the third quarter in succession.
These developments, along with important client retention and new business wins leave the company well-placed as it works towards a solid result in fiscal 2020 (SIS reports on a calendar year basis).
General Information Only
This material has been prepared by Jason Price. Jason Price is an authorised representative (AR 000296877) of 62 Consulting Pty Limited (ABN 88 664 809 303) (AFSL 548573) (62C), and a Director of S3 Consortium Pty Ltd (trading as StocksDigital).
This material is general advice only and is not an offer for the purchase or sale of any financial product or service. The material is not intended to provide you with personal financial or tax advice and does not take into account your personal objectives, financial situation or needs. Although we believe that the material is correct, no warranty of accuracy, reliability or completeness is given, except for liability under statute which cannot be excluded. Please note that past performance may not be indicative of future performance and that no guarantee of performance, the return of capital or a particular rate of return is given by 62C, Jason Price, StocksDigital, any of their related body corporates or any other person. To the maximum extent possible, 62C, Jason Price, StocksDigital, their related body corporates or any other person do not accept any liability for any statement in this material.
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.
