• Harvest Technology Group reports cash receipts up 37% on pcp to $672,000 in Q2 FY25
  • Revenue of $689,000 up 32% on pcp as three-year plan to reach profitability implemented
  • Company raises $3.065m via a range of convertible note instruments in December quarter

 

Special Report: Harvest Technology Group (ASX:HTG) has reported its Q2 FY25 results with cash receipts up 37% on the same period in FY24 to $672,000 as it implements a three-year plan to reach profitability in FY27.

The tech solutions provider, specifically focused on overcoming challenges associated with remote video and data streaming, reported revenue of $689,000 for Q2 FY25 which was 32% higher on pcp.

HTG said EBITDA of ($35,000) was a 98% improvement on pcp, mainly due to the recognition of $1.59m of the group’s R&D tax incentive rebate.

The company ended the quarter with a cash balance of $670,000 with overall net cash inflow for the quarter $297,000.

Net operating cash outflows during the quarter were $580,000. HTG said expenses included R&D, staff, sales, marketing, corporate and administration costs plus interest and other costs.

During the quarter HTG repaid $606,000 on FY24 R&D’s loan notes, $420,000 on a short-term loan, and a director’s loan of $100,000.

The company said Q2 also included cash costs of $318,000 related to termination and other costs relating to the restructuring of the company and prior period legal costs relating to the Vroon case.

Going forward, HTG said it expected reduced legal costs and further cost reductions from its cost-saving initiatives.

 

Cap raising, additional orders and new subsidiary

During the quarter HTG raised $3.065m (before costs) via a range of convertible note instruments.

In December 2024, the company announced it had secured an additional order and full advance payment from its key Five-Eyes defence partner to supply a further 30 NSI (Nodestream Integrated) device units.

Nodestream is the company’s secure integrated platform for real-time collaboration, communication and data exchange.

The company said the platform provides an all-in-one solution accessible from anywhere, deployable at any time and enables users to enhance video, audio and data streaming over unstable networks, ensuring optimal quality-of-service even under difficult conditions.

HTG also executed a binding and non-exclusive worldwide reseller agreement with Pulsar Solution Inc.

Under the agreement, HTG’s products and solutions will be resold across Pulsar’s existing and prospective customer base.

It also established a new wholly owned subsidiary, HTE (Harvest Technology) Ltd, in Ireland.

The new company will re-launch the Harvest Nodestream product range across the UK and European markets.

It also appointed Three Pro Consultants Ltd to act as sales representatives for HTE (Harvest Technology) Ltd in the UK and European market under a sales commission and buyout model.

 

Update on three-year strategic plan

The HTG board earlier in 2024 undertook a review of the performance and direction of the company to ensure its pathway to commercial success was optimised to deliver strong growth, elevated recurring revenue and increases in market share.

In its quarterly update HTG provided an update on key pillars of its three-year path to growth and profitability plan.

The company said six months of the 36-month plan had been completed with its target of profitability by FY27 on track.

HTG said it was working towards exceeding $10 million revenue growth by FY27 with $7.5 million from its existing Nodestream product range.

The company said it had a 27% increase in recurring revenue compared to the same time last year, reflecting the focus to recurring licencing versus one off sales.

As a result of its focus on recurring revenue licensing, gross margin increased from 67% in the December quarter of 2023 to 86% in the three months to December 31 last year.

Recently signed reseller agreements are also expected to boost revenue growth, with more expected to come online this quarter

HTG said it was still reviewing potential acquisitions but would only move forward on the right acquisition on acceptable terms.

“We are building the services capability in-house and leveraging reseller partners to accelerate growth,” the company said.

While making significant progress with major customer contracts, it said this “was moving slower than desired”.

However, in some further good news HTG said it had completed and exceeded its cost optimisation goal.

On its target of reducing breakeven to $10m from $14m, HTG said it had further targeted cost reductions, aiming to hit $6.5m of projected revenue to achieve breakeven

“While we are still in the early stages, the cost reduction, increase in recurring revenue percentage, and resulting margin increase are ahead of plan,” HTG said.

“Focus is, of course, on revenue growth and supporting our reseller partners to secure new customers.”

 

 

This article was developed in collaboration with Harvest Technology Group, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

 

Read MoreTech

Featured Companies

You might be interested in