ASX software stock MSL Solutions (ASX:MPW) credits its subscription model as its saviour from a significant COVID-19 impact.

This is despite COVID-19 decimating its target markets, the sports, leisure and hospitality sectors.

MSL’s products include MPower Golf, which helps golf clubs keep real time scores and serve its members digitally, and MPower Stadiums, which helps stadium operators manage their workforces and see analytics in real time.

Globally many sporting and hospitality venues have had to close or scale back operations thus draining their own revenues. But MSL’s clients are still paying because these products come under a subscription model.

“I think people had misconstrued the business. People think we rely on events in venues, when we offer an annual subscription model where [clients] pay up front for an annual fee,” CEO Patrick Howard told Stockhead.

MSL’s golf business, responsible for 46 per cent of its recurring revenue, has been virtually unaffected to date. Although non-recurring revenue has been subdued, levels were better than originally forecast.

As a consequence, MSL declared it would not need additional capital in the foreseeable future.

 

The future looks bright

Even as COVID-19 restrictions ease, sporting events and pub gatherings appear to be one of the last things to return to normality.

But the company says in this morning’s announcement that new opportunities will emerge from the pandemic.

As venues sought to cut their costs and improve operational efficiencies, MSL said this is where it could help.

“MSL sees opportunities in supporting venues as they re-emerge from COVID-19,” the company said.

Shares climbed nearly 50 per cent this morning.

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