On July 30, 2020, New Zealand-based language service provider (LSP) Straker Translations published results for the first 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.
The New Zealand-headquartered, Australia-listed LSP reported its Q1 2021 results using “receipts from customers” and “net cash from / (used in) operating activities” metrics — a somewhat unusual way of expressing top and bottom line figures as previously observed; revenue and profit being the more common.
In Straker’s Q1 2021, ended June 30, 2020, the company generated NZD 6.9m (USD 4.6m) in receipts from customers, a 13.1% increase from Q1 2020. Net cash was around USD -0.16m for the quarter.
For the 12 months to March 31, 2020, the end of Straker’s 2020 fiscal year, the LSP brought in around USD 16.3m in receipts and posted a net cash loss of nearly USD 1m.
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In a separate notice, the company announced it hired David Ingram as Chief Financial Officer commencing on 3 August 2020. Most recently, Ingram was CFO at Ultra Commerce, a digital commerce software business.
Straker also provided an update on specific business segments, and said that both media and enterprise grew during the quarter, boosted by increased demand for online events, video conferences, and content streaming as a result of the coronavirus pandemic.
Growth in these segments had helped to “mainly offset decreased revenues from ‘traditional’ work as large customers deferred near-term product launches and updates,” Straker CEO Grant Straker said in the results.
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 said June 2020 brought a recovery across all segments. He added, “The return to growth that we have seen this quarter has been very pleasing.”
The CEO also highlighted several initiatives they delivered throughout the quarter, pointing out that they had implemented in-house InDesign capabilities in their RAY platform to replace a legacy system provided by FrontLab, which was acquired by rival LSP LanguageWire in 2018.
Other technology developments included a Sitecore connector and a subtitling workbench to support media localization. The company also plans to invest further in dubbing technology and to leverage their partnership with machine translation (MT) and automatic speech recognition (ASR) provider AppTek, in which US government contractor and LSP SOSi recently bought a minority stake.
Also during the quarter, Straker said they internally reduced the company headcount by 15% at a one-off cost to the business of NZD 0.1m. According to Straker’s 2020 annual report, the company had a total of 181 staff at year-end 2020 (March 31). They now have 134 employees, based on data from their website; a difference of 47.
Although Straker’s M&A strategy was temporarily paused during the worst period of the pandemic, the LSP said it has now resumed discussions with potential targets and is evaluating new options put forward by brokers.
Straker has enough of a cash balance (ca. USD 5.8m) to continue their strategy of acquiring boutique LSPs and, according to CEO Straker, “with a better understanding of the new Covid-19 affected market environment, we are aiming to undertake at least one acquisition this financial year.”
Shares in Straker were up 10% on market open the day the company announced Q1 results, and the share price is bouncing back from all time lows at the end of March 2020.
Straker plans to hold a product roadmap and demo briefing for investors on August 4, 2020. Interested parties can register in advance here.
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