Special Report: 2020 has started well for Schrole Group (ASX:SCL), as a global network of schools continue to take up its teacher employment solutions.

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The year is just over 2 months old, but Schrole has already achieved a solid increase in Annual Recurring Revenue (ARR). As at February 27, the company’s ARR was $4.9 million – which represents 6.5 per cent growth compared with the year before.

The numbers are evidence of the competitive advantage Schole has developed with its Advantage software – an targeted online recruitment platform focused on the market for international schools.

There are currently 11,000 international schools globally, and with the rise of the Asian middle class that number is expected to double over the next 10 years.

ARR is an important metric for Software as a Service (SaaS) companies such as Scrole because it is based purely on revenue that will persist and excludes one-time revenues that are included in headline revenues but will not return in the years that follow.

Simply put, it shows that existing clients of Schrole’s are continuing and more clients are coming onboard and are expected to stay.

“The 6.5 per cent growth in Annual Recurring Revenue that was delivered in the first two months of FY20 is pleasing and reflects the strength of our business”, said managing director Rob Graham.

“Our recently expanded sales and account management team is expected to underpin continued growth throughout the remainder of the year.”

A big few months await

Schrole is anticipating growth in clients to continue over the next few months as it rolls out new features to its software and targets new sectors.

The company also reported its clients have positively received some of the company’s latest initiatives.

A good example is its school group functionality feature, which was only launched in December. This allows large educational providers with multiple locations to manage employment processes across their entire business.

There are 70 international school groups with ten or more schools and the company believes this will be a winner in the months ahead.

Schrole is also seeking to expand its training advisory service, ETAS, into new sectors. It named the construction and government sectors as two that could benefit.

Additionally, the company is benefiting from schools being compelled to undertake reference checks now just for existing and prospective teachers but non-teaching staff as well.

Schrole added that its business model has seen minimal disruption from the ongoing effects of the coronavirus.

Despite the temporary hit on economic growth, teachers are still required. And Schrole expects demand to increase steadily as more schools reap the benefits of its industry-focused platform.

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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