ASX Quarterly Wrap: Despite softening sales, pipeline is still sharp for these stocks

It’s the quarterly season again as the ASX market announcements page becomes increasingly flooded with update lodgements.

To save you the trouble of trudging through it all, we’ve wrapped up the highlights from some of the reports that caught our eye.

Roolife Group (ASX:RLG)

Roolife had a productive quarter, with RLG Health and Food & Wellbeing’s products range achieving good sales traction in post-Covid China. During the quarter, RLG secured stocking and distribution in Alibaba’s Freshippo Stores and online platform in China for its exclusive Remedy Drinks range. With this addition, the Remedy Drinks range is now sold and available in over 500 physical points of sale around China.

The company was also appointed by Fiji Kava (ASX:FIJ) to market and sell its products online in China and Australia. RLG will co-market the Fiji Kava powdered drinks range alongside its VORA protein range in the lucrative online sports nutrition channel in Australia and in China. For this contract, RLG will generate revenue through multiple channels including service fees, digital marketing fees, and margins on all product sales.

RLG is also poised to leverage its customer databases built in China over time to sell VORA products to a qualified customer base. VORA was developed to provide RLG increased margins on products sold under its own brand, and to service high-demand and high growth markets in China and South East Asia. The VORA range sales commenced and grew in Q3 FY23.

Roolife has a strong focus on China, a country with the largest e-commerce market globally, generating almost 50% of the world’s transactions, valued at $US2.3 trillion and providing access to 940 million online shoppers. The size of the addressable market and RLG’s established platform for accessing this market will provide a solid foundation to drive toward future growth and profitability for the company.

Cash receipts for Q3 were $2.26m, with total revenue of $3m. The company has improved its operating costs by 23.4% between Q1-Q3 FY23 versus the pcp. RLG has also improved its net cash used in activities by 56.5% from Q1-Q3 FY23 versus the pcp.

Spectur (ASX:SP3)

Following a large hardware sales quarter in Q2 FY23, sales were more subdued in Q3 with quarterly revenue of $1.683m and Q3 YTD revenue of $5.298m, up 20% on FY22 YTD revenues of $4.402m. Recurring revenues for the core Australian operations (excluding Spectur NZ and 3CT) were $1.074m for Q3, equivalent to an annualised run rate of $4.3m.

Estimated consolidated recurring revenue for the full year, including Spectur NZ and 3CT, is approximately $5.3m. This is a significant improvement on the annualised run rate of $3.5m in FY22, based on recurring revenue in Q3 FY22 at $863k. Growth over 12 months in annualised recurring revenue has been 23% for the comparable operations, or approximately 51% including consolidated entities.

The company expects hardware revenue to increase in Q4 FY23 in response to traditional buying cycles and the Optus contract extension from Q3 FY23. Full revenue results from 3CT and Spectur NZ will also be incorporated into latter results.

In March, Spectur acquired Spectur New Zealand in full, through the purchase of 49% of the business held by joint venture partner Deus Ex. Spectur now has 100% control and ownership of Spectur NZ, with transition and integration complete.

Spectur’s unweighted pipeline of sales opportunities was $11.509m at the end of Q3 FY23, up 17% on the $9.818m reported in the pcp. The probability weighted pipeline of $5.203m at the end of Q3 has grown 14% from the $4.584m reported in the Q2 FY23, and is at the highest level since reporting of this number has been undertaken.

The pipeline growth includes high confidence opportunities with Optus, as well as several other higher value opportunities with major construction, utility and security reseller customers.

Dimerix (ASX:DXB)

During the quarter, Dimerix continued to recruit patients to its lead program, ACTION3 Phase 3 clinical study in focal segmental glomerulosclerosis (FSGS), with 116 patients entering the study screening process. The FDA has confirmed that the inclusion of paediatrics in ACTION3 trial was appropriate.

The Phase 3 trial, which is titled “Angiotensin II Type 1 Receptor (AT1R) & Chemokine Receptor 2 (CCR2) Targets for Inflammatory Nephrosis” – or ACTION3 for short, is a pivotal (Phase 3), multi-centre, randomised, double-blind, placebo-controlled trial of the efficacy and safety of DMX-200 in patients with FSGS who are receiving a stable dose of an angiotensin II receptor blocker (ARB).

Elsewhere in the REMAP-CAP Feasibility/Phase 3 study, investigators have published the outcomes from the ACE2 renin angiotensin system (RAS) modulation study domain, recruiting patients with both severe and moderate COVID-19.

In total, 779 patients were recruited into the study. The results show the vast majority of patients were randomised to receive ACE, ARB or control, with 10 patients randomised to DMX-200 + ARB. There were no serious adverse events related to DMX-200 reported, and the safety data findings are entirely consistent with the growing strong safety profile of DMX-200. However, Dimerix acknowledged insufficient patients were recruited to determine any efficacy signal.

In the quarter, Dimerix received $2.8m in prepayment of R&D Tax incentive, resulting in a cash position of $4m at 31 March. Net operating cash flow for the March quarter was -$4.5m.

Cash Converters (ASX:CCV)

CCV says the rebound in credit demand has continued into Q3 FY23, resulting in growing Loan Books and robust retail trade.

CCV’s stores performance remains strong with sufficient inventory to meet what is a seasonally strong finish to the financial year. The company continues to leverage its data and scale to prudently manage credit risk exposure across all loan books, whilst gaining market share, particularly in the Medium Loan (MACC) and secured vehicle finance (GLA) products.

For the quarter, CCV’s gross loan book was up 31% on pcp to $268m. There were significant growth across all loan books, in particular the larger longer-term products. The company had cash balance of $59.8m, which it said would ensure the business remains well funded to continue to meet growing credit demand.

With rising interest rates and inflation putting pressure on household spending, the company remains confident in its ability to provide customers with a responsible cash solution. As the effects of high inflation and cost of living impact customers across the globe, Cash Converters says it will monitor and respond proactively to changes in customer performance.

With regulatory changes pending, the company says it remains well placed with its growing range of secured and unsecured personal finance and retail products to support new customers and to closely manage the collection’s performance and customer wellbeing across our existing customer base.

Far East Gold (ASX:FEG)

FEG has provided an update of exploration and work activities on its highly prospective portfolio of Indonesian and Australian projects.

At Woyla in Aceh Indonesia, the highest grade drillcore assay to date returned in AGM007 drilled 50m from RRD004 ‘discovery hole’ at the ‘Rek Rinti’ prospect returned a peak assay result of 0.5m at 81g/t Au and 734g/t Ag (89.31g/t AuEq).

Other highlights from Woyla include:

* 5.3m at 8.43g/t Au and 99.89g/t Ag (9.97g/t AuEq) from 201.2m – 206.5m, including 0.5m at 81g/t Au and 734g/t Ag (89.81g/t AuEq) from 201.2m in AGM007.

* 3.65m at 4.10g/t Au and 32.32g/t Ag (4.48g/t AuEq) from 84.7m – 88.35m, including 0.7m at 8.95g/t Au and 37.4g/t Ag (9.4g/t AuEq) from 85.3m – 86m in AGM003.

* 1m at 9.07g/t Au and 6.8g/t Ag from 138.35m – 139.35m in AGM009.

* 6.4m at 2.53g/t Au and 5.6g/t Ag from 38.2-44.6m incl 1m at 12.09g/t Au and 8.3g/t Ag (from 42.2-43.2m) in APD021 at the ‘Anak Perak’ prospect, confirming continuation of the interpreted high-grade gold zone over a strike length of 100m which remains open to the north.

Preliminary assay results from the Phase 2 drill program include a total of 16 diamond drill holes for a total of 2,933.85m. Preliminary metallurgical characterisation test work samples indicates gold recoveries of over 90% and silver recoveries of over 85%.

Drilling has also commenced at the highly prospective ‘Aloe Eumpeuk’ prospect with multiple occurrences of visible gold and electrum in AED002 (assays pending).

At the end of the quarter, FEG has cash and equivalents balance of $7.099 million.

Fatfish Group (ASX:FFG)

Tech venture firm Fatfish recorded a low cash recipe of $1.28 million for the quarter, down from $1.54 million in the previous quarter.

The company said this was mainly due to slower billings and collections during the first quarter of the year, which has been “a slower quarter with seasonality factors and holidays season.”

Notable events during the quarter included FFG’s Malaysian subsidiary SF Direct Sdn Bhd receiving a conditional approval from Malaysia’s Ministry of Local Government Development to conduct digital money lending activities.

The SF Direct team targets to convert the conditional licence into a full licence by Q3 2023. The company also announced a restructuring exercise to move the headquarter of ASEAN Fintech Group Ltd to Indonesia to capitalise on the fast-growing technology sector in the country.

“The restructuring will allow AFG to explore a potential initial public offering (IPO) in the country, as only entities that are domiciled in Indonesia may list their shares on the Indonesian Stock Exchange,” the company said.

The keyword there is potential, with the company highlighting an Indonesian IPO is subject to Fatfish obtaining the required regulatory and shareholder approvals (if any).

Icandy Interactive (ASX:ICI)

The game developer also recorded lower cash receipts of approximately $3.9 million, down from $7.7 million recorded in the previous quarter.

“This was mainly due to slower billings and collections during the first quarter of the year, which has been a slower quarter with seasonality factors and holidays season.”

If you’ve noticed this sounds familiar that’s because ICI is a spinout of FFG, and they clearly have the same IR team.

During the quarter, iCandy’s 60% subsidiary Gameconomy was rebranded to Hashcode Studio to align with its new Web3-focused trajectory, which is “to grow to become an industry- leading provider of metaverse-related backend solutions and technologies, such as smart contracts and integration solutions on various blockchains.“

The company’s German-based subsidiary Flying Sheep Studios GmbH nabbed EUR1.1 million (approximately $1.7 million) in German government funding to fund the development of its metaverse game Star Life.

ICI also introduced a new intellectual property (IP), The Engineers, which is a collection of 10,000 unique, high-quality AAA female characters, designed and developed by iCandy’s award-winning Lemon Sky Studios. The plan is to license The Engineers out as an IP for NFTs, as well as for games and metaverse projects.

Vection Technologies (ASX:VR1)

The VR company recorded ~$6 million in quarterly cash receipts, delivering total receipts of ~$15 million for the 9 months of the current fiscal year.

And FY23 Total Contract Value (TCV) at 28 April 2023 was ~$20 million (that’s up by 100% compared to the TCV metric announced on 31 January 2023) which bolsters the company’s revenue guidance of $24 to $26 million for this financial year.

Notably, the value of the major defence pilot order (for a top ten largest defence contractor in the world) increased to ~$2 million.

This marks VR1’s into the production chain of the authorised NATO Tempest producers, via its partners, with the pilot forming part of a larger tender of up to ~$30 million (including the pilot), which, subject to successful delivery, the company expects to finalise the subsequent order awards within the next four months.

During the quarter, VR1 also announced a partnership with artificial intelligence (AI) company expert.ai (EXAI:IM) to create an extended reality (XR)/AI – powered solution for digitalizing technical manuals – and making them manuals more accessible and easier to understand by using a combination of extended reality and AI technologies to deliver an immersive experience.

The company was also granted several patents across the US and Europe relating to its INTEGRATEDXR technology stack.

Share prices today:

At Stockhead we tell it like it is. While Roolife, Spectur, Dimerix, Far East Gold, Fatfish Group, and iCandy Interactive are Stockhead advertisers, they did not sponsor this article.