Integrated workplace management solutions provider Damstra Holdings (ASX: DTC) has posted record results for the March quarter, to end with strong operating cash flow and a well-capitalised position.
The company banked a record $7.2 million in cash receipts for the period, representing a 120% increase on the previous corresponding quarter.
Operating cash flow of $3 million for the March quarter compared with a negative result in the previous corresponding period.
Meanwhile, cash flow for the month of March was particularly strong, reflecting growth in volumes and improved gross margins.
Positive cash flow is expected to continue for the remainder of the year.
There was no reduction in user numbers or revenue from Damstra’s 10 largest clients (by revenue) during the quarter, which the company said was driven by its product offering being considered critical to client business operations.
Damstra also benefited from having clients across diversified sectors such as telecommunications, mining and construction of infrastructure projects which have not been subject to government restrictions on non-essential services.
The company closed the quarter with a cash balance of $10.4 million, reflecting payments made in relation to the February acquisition of APE Mobile and transaction costs related to other asset purchases.
It also posted zero debt and undrawn debt facilities of $5.4 million.
Damstra develops, sells and implements integrated hardware and software-as-a-service (SaaS) solutions in industries where compliance and safety are critical.
Chief executive officer Christian Damstra said the company remained well-capitalised to manage through COVID-19 disruptions and positioned to take advantage of “value-creating acquisition opportunities”.
“We have demonstrated great resilience in these trying times and we are pleased that our products [and] the client industry verticals we operate in have proven robust against a difficult economic backdrop,” he said.
“We anticipate new opportunities may unfold due to clients seeking solutions which reduce business and workforce risks [and] there may also be benefits from future infrastructure investments by as part of post-COVID-19 economic growth policies.”
The impact of COVID-19 on Damstra’s overall business has been minimal given the majority of its income is derived from contracted and recurring revenue and contracts for key clients are typically for up to five years.
The company’s revenue however, has taken a hit from delays across several greenfield sites and projects.
The roll-out of workplace management solutions to Newmont Goldcorp sites in South America has been put on hold.
Damstra’s contract with Newmont includes the supply of workforce management, access control and learning management solutions across a range of sites and geographic locations during the current financial year.
Sites in Australia, North America, Suriname, Ghana and Peru are already operational with over 14,000 Newmont users on the Damstra platform, and more than 200 hardware devices in the field.
Also affected by delays is Damstra’s UK business, which had been shortlisted for a tender with a large European construction company but must now wait until the second quarter of the 2021 financial year for the process to recommence.
A planned roll-out for a North American client has also been deferred to the new financial year.