Snakk boosts 1Q revenue 15%, slows cash burn on cost control
By Suze Metherell
Sept. 3 (BusinessDesk) - Snakk Media, the mobile advertisement developer, lifted first-quarter revenue 15 percent while slowing its cash burn by clamping down on spending.
Sales rose to $2.27 million in the three months ended June, from $1.9 million in the same period a year earlier, the Auckland-based company said in a statement. On a year-on-year basis the rate of cash usage fell 83 percent, with $146,000 spent in the first quarter, the lowest for the company in a three-month period, it said. Gross margin rose 70 percent, it said, without providing a specific figure.
"Trading in the first half of the year is traditionally slower than the second half, there has been a focus on cost management, product pricing strategies and margin control in order to deliver a strong commercial performance for the financial year," chief executive Mark Ryan said. "With revenues of circa $10 million per year, Snakk has now reached a point of scale where each dollar of revenue is used far more efficiently than when it was a smaller company."
Snakk founder and chairman Derek Handley, who still controls 15 percent of the company, announced earlier this week he will step down as a director of the mobile advertising technology company by the end of the year in a wider boardroom shuffle. Director Michelle Kong will also retire after the Sept. 16 annual meeting as the company looks to rejuvenate the boardroom, installing Sydney-based Peter James, who is chairman of Macquarie Telecom, an Australian cloud hosting business, as executive chair.
The company reported a loss of $4.2 million in the 12 months to March 31, more than twice the loss of $1.8 million a year earlier. Annual sales rose 40 percent as the mobile advertiser entered new markets in Asia.
Snakk’s 2015 annual report was tagged by auditor Staples Rodway, which cited a “material uncertainty” over the company's ability to meet revenue targets and reach a financing agreement, while keeping an unqualified opinion on the accounts. Snakk later issued a statement saying it had sufficient cash reserves to enable future growth.
Snakk's shares on the NZAX last traded at 4.8 cents, and have declined 47 percent over the past 12 months.