Despite the ongoing COVID-19 impacts, AD1 Holdings’ (ASX: AD1) cash receipts for the December 2020 quarter grew 46% to $1.39 million – shored up by a strong pipeline of potential new sales.
The 46% rise was compared to the December 2019 quarter.
Meanwhile, operating outflows for the period were $1.59 million, which included a $172,000 one-off cost relating to the acquisition of Art of Mentoring.
Excluding the one-off transaction, AD1 noted net operating cash flow remained above break-even.
For the half year ending December 2020, cash receipts rose 42% compared to the corresponding 2019 half year period.
Commenting on the results, AD1 chief executive officer Prashant Chandra said they were “especially pleasing” considering the impacts of COVID-19.
COVID-19 caused “significant delays” in prospective customers making decisions to adopt AD1’s offerings due to the ongoing economic uncertainty.
Mr Chandra said he expects the company’s strong business pipeline will lead to more sales as economic conditions improve due to the roll out of vaccines worldwide.
“It is also important to note that the company is yet to realise the full benefit of the new customer wins recorded in the first half of FY 2020,” he added.
The sales conversions include new client wins across the group and project work with government clients for ApplyDirect.
“On the ApplyDirect front, in addition to new business opportunities, the company is working with both its government customers to scope out the next set of initiatives.”
“The second half of the financial year has historically seen a strong uptake from our government customers in relation to project work and we expect the same this year with opportunities in late-stage discussion,” Mr Chandra said.
Art of Mentoring adds value
During the December quarter, AD1 completed its acquisition of Art of Mentoring, which further diversified the company’s revenue stream.
Since the acquisition, Art of Mentoring has onboarded eight new clients, with 15 new clients in total since the start of the current financial year.
Some of these new clients include notable companies such as Toyota Australia, Fair Work Ombudsman, Aurizon and the Royal Australian Navy.
“Art of Mentoring continues to impress with its performance being 80% ahead of the year prior,” Mr Chandra pointed out.
“Art of Mentoring has signed up a significant number of new customers in the short time since acquisition and maintains a 100% renewal rate with existing customers,” he added.
Utilities software division
According to AD1, the meters under management for the utilities software division increased 12.5%. This was attributed to organic growth and recent implementations.
AD1 is also waiting on 3P Energy to begin implementation which is expected to add to recurring revenue.
The company provides customer branded recruitment technology platforms, mentoring software solutions, utilities software billing services and management platforms and related services.