On October 30, 2020, New Zealand-based language service provider (LSP) Straker Translations published results for the second quarter of financial year 2021. The company has been trading under the ticker symbol STG since it went public on Australia’s ASX market in October 2018.
In Straker’s Q2 2021, ended September 30, 2020, the company generated NZD 7.2m (USD 4.8m) in revenues. Straker also reported unaudited revenues for the six months to September 30, 2020 — Straker’s first half 2021 — of NZD 14.8m (USD 9.9m).
At the end of the quarter, Straker’s full financial year run rate revenue was NZD 28.7m, 4% ahead of the previous year.
The LSP also provided figures based on two different financial metrics: sales orders, which Straker said were up 29% in Q2 compared with the same period the previous year, and customer receipts, which increased by 7%.
Straker did not report profits for the period but said that operating net cash outflow was NZD -0.04m, a less common way of expressing bottom line figures. They finished the first half (H1) with a cash balance of NZD 7.7m.
Straker CEO Grant Straker expressed joy at the company’s first half results on Twitter, in particular given the challenges and disruption created by the Covid-19 pandemic.
One of the hardest half years in history & the team delivered fantastic results in the covid context.— Grant Straker (@gstraker) October 29, 2020
– Sales up 29% on FY20 & largest ever half year
– Sept biggest sales month in company history at more than $3m
– 80%+ of revenue is from repeating revenue customers
Providing an update on the impact of Covid-19 on the business, Straker said that they experienced a recovery across “nearly all market segments” in Q2. Having observed in a previous update that they had seen a drop in sales orders of around 7% between mid-March and late-April 2020, Straker had a particularly strong September, with sales orders at their highest yet.
Moreover, the business incurred “lower overhead costs” during the period thanks to “acquisition synergies and Covid-19 right sizing.” (Straker reduced company headcount by 15% — around 50 people — earlier in 2020.)
Straker also hit pause on their strategy of serially acquiring boutique LSPs at the end of March 2020, given the then emergent global pandemic. The company now looks set to be back on the M&A trail, and said that they are currently evaluating several new opportunities and plan to complete “at least one material acquisition” before the end of March 2021.
This latest set of results marks a step in the right direction for Straker, which was loss-making at the time of its October 2018 IPO. The company closed out the 2020 fiscal year with a net cash loss of nearly USD 1m and is yet to deliver a profit-making year.
Straker’s current market capitalization stands at around USD 37m. The company’s favorable Q2 results failed to impress investors, however, and shares fell by around 1.5% after the announcement.
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