Provider of accredited training and global HR software-as-a-service (SaaS), Schrole Group Ltd (ASX: SCL), has released its quarterly activities and cash flow report for the quarter ended 31 March 2023 (Q1 FY23), and it is now on a clear path towards cash break-even.
Cash receipts from customers continue to rise
In the March 2023 quarter, total customer receipts increased 23% to $1.29 million, with software receipts in line with PCP and training receipts almost double at 98% higher.
The March quarter is a seasonally weaker quarter for Schrole’s total cash receipts from customers, but the trajectory upwards over the past year shows that we continue to grow. The growth in training receipts stemmed from a solid quarter domestically plus receipts related to the work completed in Guinea.
Momentum towards cash break-even gathers pace
Schrole continues to head toward break-even for its net operating cash flow due to the continued momentum in receipts from customers across software and training, noting the training revenue by its nature is less predictable, and our focus long term is on achieving cashflow breakeven also at a divisional level.
Net cash used in operating activities was $371,000 for Q1 FY23, which is a $97,000 improvement on the $468,000 reported for the same period last year. The improvement in net operating cash outflow was mostly driven by the improved cash receipts and recovery of part of previous year investment in product development with the receipt of a R&D incentive.
Ongoing relationship with Rio Tinto in Western Australia
As announced on 20 March 2023, Schrole received purchase orders from Rio Tinto for On Job Training (OJT) programs in Western Australia for about $377,700.
Schrole Develop, the business unit that creates accredited training solutions to meet specific client needs, will provide 28 courses to approximately 220 staff across Rio Tinto’s facilities in Western Australia. This is consistent with course delivery in the prior corresponding period. These orders, containing the standard business and termination clauses, will be invoiced June FY23 quarter (Q2 FY23).
Appointment of Chief Commercial Officer
Schrole appointed Mark Oelofse as CCO on 3 April 2023 to lead the Company’s commercial expansion of its broad HR and training product suite and technology platform services into key international markets. He is based in Western Australia.
Schrole is the only provider of full suite specialist HR solutions for the international education sector, from finding and tracking applicants, through to the hiring and onboarding process, along with delivering accredited training courses and job training program development.
Commenting on Q1 FY23, Managing Director, Rob Graham, said:
“While the first quarter for Schrole’s fiscal year is traditionally the quietest time of the year due to the seasonality of our business, we continued to achieve improvements in expanding our overall sales pipeline and see a clear path towards cash break-even, which is a major milestone for a SaaS company.
“Our move towards cash-break even is helped by our new direct sales model and no revenue share at all going to the former partnership with ISS, as it finished at the end of last year.
“We have increasingly turned our focus to creating foundations that will foster stronger growth and allow us to reach our potential. Our investments in sales and marketing activities will help us expand further into our key international education market. This is combined with investment into our software capabilities to bolster more opportunities for sales. The appointment of Mr Oelofse as CCO will utilise these capabilities and drive the market expansion.
“Schrole has plans to further enhance its full-suite of HR talent management solutions over the remainder of FY23 to help place the right educators with the right institutions, so schools can focus on improving education standards worldwide.”