Crowd Media Holdings (ASX: CM8) has posted a “near-break even” position for the first half of the financial year ending June 2020, with the company claiming it signals a “significant financial turnaround”.
For the half year ending December 2019, Crowd Media achieved $8.5 million in revenue, with a small loss of $36,000 in underlying earnings before interest tax depreciation and amortisation (EBITDA).
This compared to the previous corresponding period which was a loss of $1.3 million in underlying EBITDA.
Non-executive director Robert Quandt led the turnaround, which involved “deeply” scrutinising the “quality of revenue” from the Q&A and subscription verticals to extract maximum profit from these streams.
The evaluation led to discontinuing business in unprofitable markets, enhancing efficiency and rebalancing the service.
As part of this, Crowd Media achieved stable revenue for the final four months of 1H FY 2020, after one-off adjustments.
This followed restructuring costs and personnel overheads in June last year.
Crowd claims it has optimised its workforce to match the size of the business.
London Labs and I am Kamu
As the company moves forward, it will be selling London Labs and I am Kamu branded hair care and accessory products directly to consumers starting this month.
According to Crowd Media, both brands have “compelling” products that are expected to bring the company “healthy gross margins” of around 75%.
The company also noted it would improve its cash flow with payment to be collected immediately, while holding 30 days’ credit from the brand.
Under Crowd Media’s turnaround, the first phase will involve it selling products and services it owns or part owns or is strategically aligned with.
“We are now ready to launch with the London Labs and I am Kamu brands, and have other brands in the wings to follow,” Crowd Media Steven Schapera said.
“Revenue will flow from these initiatives beginning February.”
Later in the year, Crowd Media will shift its focus to more scalable service sales via collaborations, partnerships or strategic alliances. These will be modelled on its arrangement with London Labs.
“Initially, this will be in the regulated travel insurance and fintech space,” Mr Schapera noted.
As part of this, Crowd Media has a letter of intent with Pluto Travel.
In Crowd Media’s third strategy phase, it plans to launch a conversational voice and visual interactive digital media product, with applications across various sectors.
Sectors will include influencer marketing, customer service, healthcare and education.
A letter of intent has been formed with Forever Holdings as part of the commercialisation strategy for this stage.