Novatti, Playside, Netlinkz light up earnings season for ASX small caps
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The ASX earnings season has gone into turbo-charge mode today, with a slew of small caps tech companies reporting their results.
Fintech play Novatti has announced record high sales revenues for the half year, up by 49% year-on-year.
Figures show that Novatti achieved back-to-back quarters of record sales revenue, with $3.56 million in the September quarter, and $3.79 million for the December quarter.
Its core payments processing business also delivered solid results, up by 12.5% on pcp.
The strong result is a validation of the company’s long term strategy in developing its banking and payments ecosystem over the last years, as it transitions from development to monetisation phase.
The company has continued its push into that space during the half, after being awarded regulatory approval for ‘issuing and managing means of payment’ in New Zealand. This will allow the company to issue cards in that market.
It has also partnered with global giants Google Pay and Samsung Pay, allowing Novatti’s users to make online purchases by just tapping their devices through the Google Pay and Samsung Pay platforms.
Partnerships with Apple Pay, UnionPay, and Ripple during the half have also cemented its expansion into the major global payments markets.
Just two days ago, Novatti’s share price reached a new record high of 53c after announcing the launching of Lifepay, a company which it has a 25% stake in. The Lifeplay platform allows users to manage personal finances from a mobile device.
The company reported a bottom-line loss for the half year $3.1 million, down 53% on pcp.
Novatti’s share price has retreated this morning to trade at 40c.
Game developer Playside has also reported a 63% increase growth in sales revenue to $5 million, following its successful $15 million IPO in December at 20c a share.
The company’s shares are trading at 42.5c today, significantly higher from its IPO price.
The highlight for the half was the growth in revenue from its Original IP Games, with revenues reaching $2.98m, up $2.2m on the pcp. This was driven by the success of the Animal Warfare mobile title launched in August 2020.
On the back of the strong revenues, the company reported an EBITDA loss of $1.63 million during the half – due mainly to non-recurring expenses such as an employee option plan as well as IPO expenses. When these expenses are removed, the EBITDA loss came to $0.73 million.
Playside chairman, Cristiano Nicolli, put the loss down to the rapid growth phase the company is experiencing, with significant employee hirings and increased hardware and software purchased to develop a number of large scale “Original IP Games”.
Original IP Games are those titles Playside has planned for next generation consoles such as the XBox Series X and PS5 in 2021.
Looking ahead, the company aims to forge more strategic partnerships, with games such as Norris Nuts (World of Pets) and the recently signed Click Management, LazarBeam & Fresh partnership in the pipeline.
Cloud solutions Netlinkz has posted a 1,262% increase in revenue to $8.72 million for the half. The solid results however, have translated into a $15.4 million net loss, up by 41 per cent on pcp.
The loss is mainly due to significant investments in design, implementation and hardware of$7.42 million, and financing costs of $8.58 million.
Focus for the period was to reach cash flow breakeven, with the Australian operations now reducing its cash burn to $0.5 million per month with further cost savings expected in the second half.
A key milestone was the partnership with LNS International, which has an extensive network and client base in the APAC region. This partnership has allowed Netlinkz to focus on the localisation of the Virtual Secure Network (VSN), and providing secure network solutions based on customer requirements assessed by LNS.
The China operation has increased by a significcant 1,100% in revenue, after the launching of VSN 2.0 in August. A number of distribution agreemens for the VSN 2.0 were also signed in Japan.
Back home, the Australian team has made strong progress on implementing the infrastructure required for the global rollout of VSN. Australia is the focal location in managing the rollout.
Other companies to report strong growth include AVA Risk Group (ASX:AVA) who reported 1,071% increase in net profits and Pivotal Systems (ASX:PVS), who reported a 44% increase in revenues for the half.
At Stockhead we tell it like it is. While Novatti, Playside and Netlinkz are Stockhead advertisers, they did not sponsor this article.