Horror story: Readcloud posts a scary loss of $1.2m
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E-learning platform and share market darling Readcloud has reported a big maiden loss.
Readcloud (ASX:RCL) swung from a profit last year down 884 per cent to a $1.2 million loss.
The reason was a large hike in publisher and bookseller costs to $1.3 million from $196,525 in 2017, which the company said was because of a growth in sales during the year.
Readcloud listed in February. It sells cloud software for schools for storing digital books and has watched its share price rocket 176 per cent from a starting low of 22.5c to a high in mid-August of 62c.
Investors were not impressed with the loss result and dumped the stock, sending it down 10 per cent to 42c.
Other higher costs included staffing costs and share based payments.
Revenue almost tripled to $2.1 million, bolstered by a rise in licence fees and eBook sales which more than tripled to $1.5 million.
Readcloud has 50,000 contracted users in 70 schools, compared to 21,800 contracted users in 50 schools by June 30 in 2017.
Its prospectus in February forecast 75 schools by the end of June this year.
“Although still early in the sales cycle for the 2019 school year, ReadCloud is seeing the strongest sales pipeline in the company’s history,” the company said.
The company has $4.6 million in cash and no debt.
Stockhead is seeking comment from Readcloud.