Tech: RedBubble shares climb to all-time highs on positive trading update

The rise of online sales has been one of the key trends to emerge from COVID-19, and e-commerce platform Redbubble (ASX:RBL) says it’s been one of the beneficiaries.

In a trading update this morning, the company reported revenue growth in the June quarter to-date of 96 per cent (adjusted for currency fluctuations).

RedBubble, which provides an online marketplace to generate sales for independent artists, said it had “benefited from an acceleration in online activity throughout” the June quarter.

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Core earnings for the 11 months to May 31 came in at $11.9m, a gain of 86 per cent on a constant currency basis. RedBubble said the numbers are based on its internal management account, and have not yet been subject to an external audit.

The company said increased demand was seen across both of its core marketplace platforms, as well as different geographical jurisdictions.

The latest evidence of increased momentum saw Redbubble shares climb more than 35 per cent in morning trade to new highs above $2.15, before the stock eased back below $2.

While revenue has been climbing, the company said it’s also embarking on an operational restructure which will see “reductions in headcount and related operating costs”.

The core teams left in place will focus on strategic initiatives around artist acquisition and retention, and customer loyalty.

“The reorganisation is expected to generate annualised gross savings of $5.6m in operating costs, with one-off costs of $2.1m. A portion of the gross savings will be reinvested in core growth initiatives,” Redbubble said.

The company flagged that a full set of audited numbers will be provided to the market when it releases its full-year results in August.

In other ASX tech news today:

Online recruitment platform AD1 Holdings (ASX:AD1) said its longterm managed services agreement with the NSW government had been renewed for another two years.

The deal centres around AD1’s hosting and maintenance services for the iworkforNSW careers platform. CEO Prashant Chandra said the contract renewal “solidifies the revenue foundation of the company”.

And air-traffic management company Adacel Technologies (ASX:ADA) announced a deal with the US Army, for the purchase of more than 60 Adacel flight simulators.

Adacel said the contract would be worth around $2.8m, and would include software and hardware support in connection with the US Army’s Air Traffic Control Common Simulator.