The ReadCloud Ltd (ASX: RCL) share price is sliding after the company released its earnings for the financial year 2021 (FY21).

Right now, the ReadCloud share price is trading at 29 cents, 3.33% lower than its previous close.

ReadCloud share price slumps despite improved margin

Here’s how the provider of digital e-learning resources performed in FY21:

• Maiden full-year underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) profit of $15,553, up from FY20’s underlying EBITDA loss of $161,141
• Statutory net loss after tax of $1.15 million
• $7.68 million of revenue, up 3.1% on that of FY20.

FY21 was a year of ups and downs for ReadCloud.

The company advised that its VET segment saw a 52% increase in gross profit to $2.9 million.

Its full-curriculum segment’s revenue dropped 17% to $3.92 million as a result of a $1 million reduction in reseller revenue and the loss of 4 school customers.

ReadCloud said the drop in revenue was partially offset by an increase in eBook sales and new direct full-curriculum customer schools.

The segment recorded $1.18 million of profit.

The ReadCloud platform saw a 21% increase in direct full-curriculum users, of which it now has 57,000. The number of VET-in-school users also increased 56% to 14,000.

The company’s platform now has more than 116,000 users and more than 550 school and educational institution customers.

Finally, ReadCloud’s published and bookseller expenses dropped to $3.05 million in FY21, down from $3.89 million in FY20.

The company ended the period with $6.3 million of cash and $460,000 in debt.

What happened in FY21 for ReadCloud?

Acquisitions and enhancements drove ReadCloud and its share price in FY21.

The company completed its acquisitions of the College of Sound & Music Production and the Ripponlea Institute in FY21.

It’s now the second-largest private operator in the Vocational Education & Training-in-Schools market in Australia by student numbers and the largest by the number of VET qualifications offered.

ReadCloud spent $1.8 million to acquire the Ripponlea Institute, using a mix of cash and scrip. The institute provides VET programs in the language segment to 70 Australian secondary schools and Certificate IV in Training and Assessment.

According to ReadCloud, the College of Sound & Music Production is the market leader in VET courses for the music industry. It provides VET programs to 184 Australian secondary schools. ReadCloud paid $1.45 million for the acquisition, using a combination of cash and ReadCloud shares.

Additionally, ReadCloud worked to enhance its software platform in FY21. The improvements will boost its scalability and maintain its competitive advantage.

Over FY21, the company signed up 22 new schools for full curriculum needs in 2021. To help navigate the challenges, ReadCloud signed up 3 new full-curriculum resellers during FY21.  

As at 30 July 2021, ReadCloud had more than 57,000 direct full-curriculum school customer users, 21% more than it did at the same time the prior year. It also had more than 45,000 reseller full curriculum school customer users, down 20% compared to June 2020.  

What’s next for ReadCloud?

Here’s what those interested in the ReadCloud share price might want to keep an eye on in FY22:

The company plans to leverage its new acquisitions by taking advantage of new cross-selling opportunities.

85% of ReadCloud’s school customers only use one of its VET providers.

It believes schools generally prefer to deal with fewer registered training organisations to simplify the compliance requirements and to only use one software platform.

ReadCloud plans to begin cross-selling courses across its businesses in the future and expects to see the benefits in FY22.

Additionally, ReadCloud will invest in its full curriculum sales channel in FY22.

In response to COVID-19 restrictions, ReadCloud has implemented a new outbound and online video force selling its full-curriculum segment. The new sales strategy has already brought about a pipeline the company’s working on for the 2022 school selling season.

Finally, ReadCloud plans to grow its reseller sales channels. It’s in discussions with a number of school booksellers that might be interested in becoming a ReadCloud reseller.

The post ReadCloud (ASX:RCL) share price slips despite maiden EBITDA profit appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended ReadCloud Limited. The Motley Fool Australia has recommended ReadCloud Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Magnis Energy Technologies Ltd (ASX: MNS) share price is pushing higher today after the company provided a project update.

At the time of writing, Magnis shares are up 5.56% to 38 cents apiece. In comparison, the All Ordinaries Index (ASX: XAO) is up 0.26% to 7,780 points.

What did Magnis announce?

In a statement to the ASX, Magnis advised that the project status of its New York plant is 23% completed.

The company has completed initial works including the internal building clear-out. Now, facility customisation work has commenced with machinery roll-out to start next month. Furthermore, construction material for the facility has continued to arrive at the factory.

The iM3NY team collaborated with Ramboll to continue advancing the lithium battery plant’s design feed information. This includes progress on a number of detailed engineering design works to bring the project online.

Following the Environmental Justice plan approval, the company’s Air Permit application, currently at the public review stage, has received no objections to date. It is expected to be given the green light sometime in the near future.

The company also appointed experienced renewable energy specialist Lukasz Cianciara as Director of Investments.

Mr Cianciara has spent more than 30 years in Senior Level Capital Markets, working for a variety of high-profile companies. They include Citadel Investment Group, Castlepines Global Equity, Brean Capital, CIBC, Sumitomo Bank Capital Markets and Credit Lyonnais.

Management commentary

iM3NY CEO Chaitanya Sharma noted the company’s rapid developments, saying:

There is some serious progress made to date, with things about to ramp up from this point on, which is exciting for our ever-growing team. We are working tirelessly to achieve our milestones on time and on budget.

Magnis chair Frank Poullas added:

Great progress continues to be made and the appointment of Lukasz is a major milestone as iM3NY looks towards a US Listing.

Magnis share price snapshot

Over the last 12 months, the Magnis share price has soared almost 90%. This came off the back of the US government awarding a lithium-ion battery supply contract to Magnis’ partner, C4V.

On valuation grounds, Magnis presides a market capitalisation of roughly $353 million with approximately 929 million shares on its registry.

The post Magnis Energy (ASX:MNS) share price lifts 5% on lithium battery update appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Altium Ltd (ASX: ALU) share price has sunk into the red during afternoon trade on Monday.

Shares in the software company are on the decline as the company reported its FY21 earnings with mixed results.

Let’s investigate further.

How did Altium perform in FY21?

Altium grew its total revenue by just 1% year on year to US$191 million. Excluding the divested TASKING business, revenue actually climbed 6% from the year prior.

In terms of the revenue split, board and systems revenue gained 2% over the year, whereas the company’s Octopart segment revenue increased by 42% to US$27 million.

Conversely, Altium’s manufacturing revenue came in 7% behind FY20 at just US$2.4 million.

Altium’s recurring revenue also increased as a percentage of overall revenue, comprising 65% of total sales versus 59% the year prior.

Despite the revenue growth, the company’s profit before tax declined 7% year on year to US$48 million. Altium explained this was from its operating costs increasing at a faster rate than sales revenue. Its FY21 EBITDA also decreased by 3% from the year prior.

Even still, net profit after tax (NPAT) came in at US$35 million, which signifies around an 80% increase from FY20.

Altium’s management foresees a period of growth for FY22. In what should be a positive for the Altium share price, the company has upgraded guidance for FY22 and estimates revenue of between US$209 million to US$217 million for the year. This calls for 16% to 20% sales growth from FY21.

The company also forecasts that annual recurring revenue will increase a further 23%-27% over the next year.

Despite the seemingly robust performance, investors are selling Altium shares from the open on Monday.

At the time of writing, Altium shares have clawed back some ground and are now exchanging hands at $31.02, still an 11% drop into the red.

Altium share price snapshot

The Altium share price has struggled this year to date, posting a loss of 11% since January 1. This extends the loss over the previous 12 months to almost 16%.

Both of these results have lagged the S&P/ASX 200 index (ASX: XJO)’s return of about 25% over the past year.

The post Altium (ASX:ALU) share price down 12% after earnings report appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Altium. The Motley Fool Australia owns shares of and has recommended Altium. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Wesfarmers Ltd (ASX: WES) share price has slipped to a 1-month low. This comes as prolonged lockdowns weigh on the diversified conglomerate.

Wesfarmers CEO Rob Scott told the Australian Financial Review (AFR) that it might be time to take a different approach instead of being “fully open or fully shut”.

What did Wesfarmers’ CEO say?

Scott argued for a “more considered plan for the reopening of certain sectors under COVID-safe conditions and easing of some community restrictions, including greater freedoms for those who are vaccinated.”

He flagged that continued lockdowns in New South Wales and Victoria would eventually lead to a point where the “benefits of those lockdowns are outweighed by the broader harm that’s being done.”

About Wesfarmers, Scott said, “We’ve got nearly one in 10 workers in Sydney stood down without pay.”

We are seeing mental health issues skyrocket – particularly in the under-30s. We are seeing small businesses and even large businesses under enormous stress. There comes a tipping point where all of this harm being done by lockdowns is worse than the problem we are trying to solve.

Wesfarmers share price slides to month low

The Wesfarmers share price was trending strongly in August, briefly rallying to an all-time high of $67.20 on 20 August.

The record high was short-lived as Wesfarmers shares closed last Thursday at $63.96 – the day before its FY21 results announcement.

Wesfarmers shares fell 2.75% to $62.20 on Friday. That’s after the company flagged the effect of recent COVID-related lockdowns on its retail divisions.

Bunnings sales for the first 7 weeks of FY22 had declined by 4.7% on the prior corresponding period (pcp). Officeworks sales had also slumped 1.5% on the pcp. While combined Kmart and Target sales for the first 8 weeks of FY22 tumbled 14.3% on pcp. Almost 50% of Kmart and Target stores were forced to close by mid-August.

Management warned that:

Given the impact of lockdowns in recent months and the prospect of continued trading restrictions, earnings in the Group’s retail businesses during the first half of the 2022 financial year may be below the prior corresponding period.

At the time of writing, Wesfarmers share price is down another 3.2% to a low $60.21.

The post Wesfarmers (ASX:WES) share price dips amid boss’ call for easing of restrictions appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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