Special Report: Quarterly reporting season is an important time for small-caps stocks, when investors get the opportunity to see if a company’s best-laid business plans are converting to underlying cashflow.

And teacher recruitment platform Schrole Group (ASX:SCL) had plenty of good news for the market when its results were lodged last week.

The company’s 4C filing for the December reporting period showed annual cash receipts from customers climbed to $6m in 2019.

The result is evidence of Schrole’s traction in the market as it executes on a multi-channel approach, led by its Advantage teacher recruitment platform.

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Schrole now has 385 schools actively engaged on the platform, which generated annual recurring revenues of more than $4m in 2019. And importantly, the rate of new renewals in the second half of last year exceeded 80 per cent

Having established a strong early footprint, Schrole now has a great opportunity to capitalise on what is a huge market across the Asia-Pacific region.

In particular, the company pointed out that “there are over 70 international school groups consisting of 10 or more schools, representing a total of over 2,000 schools”.

To drive home its first-mover advantage in the market, Schrole also introduced added product functionality in December which allows clients to manage their recruitment activities across multiple schools in different countries.

“During FY20, it is anticipated that this functionality will represent a clear differentiator as the company seeks to sign up these school groups to the Advantage platform,” Schrole said.

Schrole’s 4C filing also showed positive momentum across its other verticals including verification checks, casual staff solutions and ETAS — its innovative training division which offers nationally-recognised training qualifications in leadership and management.

The Perth-based company has found particular success with ETAS, which provides training services for major global mining companies and government departments.

As evidence of that momentum, ETAS booked revenues of $310,000 in the December quarter, a 35 per cent increase from the prior comparative period.

“The outlook for the ETAS business remains positive, with a strong pipeline of forward bookings for training courses in FY20, together with further training consultancy opportunities for overseas clients that ETAS is currently pursuing,” the company said.

The success of Schrole’s multichannel approach resulted in annual revenues across the board in 2019 of $6.2m, an increase of 36 per cent from FY18.

And with a proven model ideally designed to meet staff shortages in the huge market for international schools, the company is confident it has the platform to drive revenues exponentially in 2020 as it moves towards cash-flow breakeven.

This story was developed in collaboration with Schrole Group, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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